Net mortgage approvals for house purchases rose to 58,200 in June, up from 56,600 in May, according to the Bank of England’s latest Money and Credit report.
Approvals for remortgaging with a different lender also edged higher, reaching 34,200 from 33,800 in May, while net mortgage borrowing by individuals more than doubled to £7.7bn in June from £3.3bn in May, exceeding the previous six-month average of £4.9bn.
Nathan Emerson, CEO at Propertymark, commented: “A consistent Bank of England base rate, competitive mortgage products, easing inflation and a temporary reduction in geopolitical tensions are all likely to have supported buyer confidence during the month.
“As inflation continues to ease, households should benefit from greater financial certainty, making it easier for many prospective buyers to plan ahead, build savings for a deposit and take advantage of more competitive borrowing costs.
“However, there remain headwinds. Inflation is still above the Bank of England’s 2 per cent target, while higher household costs, including increased energy prices from 1 July, continue to place pressure on household finances.”
Iain McKenzie, CEO at The Guild of Property Professionals, said confidence is gradually returning. However, he added: “Mortgage approvals are a useful indicator of future demand, and while approvals for house purchases edged higher in June, they remain just below the recent six-month average, highlighting that buyers are still proceeding with caution.
“After an unusually early summer slowdown, driven by everything from the hot weather to geopolitical tensions and political uncertainty closer to home, the market is entering a more balanced phase. Buyers have more choice than they have had for some time, which means they’re taking longer to make decisions and negotiating harder on price.
“For sellers, realistic pricing has never been more important. Homes that are launched at the right price continue to attract interest, while those that come to market overpriced often require reductions and spend significantly longer on the market.”
Nicky Stevenson, managing director at Fine & Country, stated: “The current market is very different to the frenetic conditions of recent years. Buyers are spoiled for choice as more homes come to market, giving them greater negotiating power and making them increasingly selective. This means sellers can no longer rely on strong market momentum to achieve ambitious asking prices.
“Properties launched at realistic, evidence-based prices are continuing to attract interest and agree sales, while those brought to market above their market value often require price reductions and spend considerably longer on the market.
“Although geopolitical tensions continue to weigh on sentiment, the fundamentals of the market remain sound. There is still a significant cohort of non-discretionary movers who need to buy and sell regardless of wider economic conditions, and that continues to provide an important foundation for market activity.”
