Mortgage activity dips in December
Property industry reaction to the latest mortgage approval data from the Bank of England.
The latest figures show that: –
Mortgage approvals on house purchases for December sat at 61,013 down (-4.8%) from 64,072 in November.
Approvals are down (-8.4%) when compared to the 66,634 seen in December 2024.
This decline was expected due to market slowdown at the end of the year, however there is still optimism for a return to growth in the coming months, especially if rumoured bank rate cuts materialise.
Richard Merrett, Managing Director of mortgage adviser, Alexander Hall, commented:
“A small dip in mortgage approvals during December is to be expected and is simply a reflection of market seasonality in the lead up to Christmas, rather than an early sign of declining market sentiment.
However, the bigger picture remains encouraging, particularly when you compare current market conditions to a year ago. Rates are lower, affordability has improved, and the average buyer is now around £1,000 a year better off when it comes to the cost of their mortgage repayments.
With lenders continuing to offer more flexibility and stronger affordability assessments, this seasonal dip is likely to be short lived and, as activity picks back up, we expect approvals to follow suit.”
Jonathan Samuels, CEO of specialist lender Octane Capital, commented:
“A modest dip in mortgage approvals during December should be viewed in the context of the time of year and while Autumn Budget uncertainty had been removed by this point, the festive period naturally slows decision-making and transaction progression.
What’s far more important is the underlying improvement in market conditions compared to the same point last year. Inflation has remained under control, borrowing costs are lower, and affordability has strengthened, all of which has helped to support buyer confidence.
As we’ve entered the new year, these foundations suggest that any softness seen in December is likely to be short lived, with activity expected to pick up as momentum builds through the early part of the year.”
Nathan Emerson, CEO of Propertymark, comments:
“Despite the economy gradually showing signs of improvement, it is disappointing not to see this fully translate into a dynamic housing market quite yet. We currently sit in a position where people who are thinking of a house purchase are rightly cautious regarding their finances. It is, however, positive to see a modest uplift regarding remortgaging as 2025 ended.
“For the housing market to deliver sustainable growth, there are many cogs that need to turn in harmony with each other, and although we are certainly seeing encouraging signs regarding the number of properties coming to the market, as well as initial buyer interest on properties – there is a need for overall financial confidence from consumers to for the ‘housing equation’ to fully work.
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