04 May 2023
If you are covering the latest Bank of England Money and Credit statistics, please see the following comment from Charlotte Nixon, mortgage expert at Quilter:
"New statistics today paint a mixed picture for the housing market, with mortgage lending to individuals experiencing a significant drop, reaching the lowest level since June 2011. This decline will be down to persistently high inflation, the elevated cost of living, and rising interest rates, which have placed considerable strain on household budgets.
"However, net mortgage approvals for house purchases have shown resilience in the face of these issues, increasing to 52,000 in March from 44,100 in February. This increase could be linked to a modest rise in consumer confidence, as individuals grow accustomed to mortgage rates around 4.5% and a predicted path to a base rate peak of 5%. This is also likely a result of the usual uptick in house purchases in spring.
"However, with a base rate hike likely on the cards next week this new found optimism for buyers might be quickly dampened. Whether these increases are enough to completely rain on a usually more buoyant market in the spring and summer months is yet to be seen.
"Despite the cost of living crisis stretching budgets each month, £3.5 billion was deposited into National Savings and Investment (NS&I) accounts in March, the highest since September 2020, a time when some people had more money to save due to an inability to do much else because of lockdown. This uptick in savings suggests individuals are seeking more secure saving options and are taking advantage of higher interest rates.
"In light of these varying economic factors, it's essential for individuals to carefully consider their borrowing and saving strategies. With fluctuating interest rates and mortgage approvals, prospective homebuyers and existing homeowners should seek professional advice to make informed financial decisions tailored to their unique circumstances, as the market continues to grapple with the multitude of challenges."
