UK Mortgage Approvals: Is the Tide Turning? Expert Q&A

Mortgage approvals continue to drop across the country with net mortgage approvals falling from 49,500 in July 2023 to 45,400 in August 2023. This follows a previous and continuous drop of 54,600 approvals in June 2023.

Open Property Group have researched into the current state of UK’s mortgage approvals and what it means for current and potential homeowners, and they have got an exclusive insight into what the industry experts think. Here’s what Open Property Group have asked the experts and here’s what they think:

Question 1 – Do you forecast an uplift in UK Mortgage Approvals within the next 12 months?

Ben Grey from CHN Financial Consultancy says “I would say the opposite. I think the real issue we are starting to see is not only issues for applicants but issues where valuers are concerned. Clients are having offers accepted on what appears to be fair market conditions, but the surveyors going out and valuing properties on behalf of lenders are being extremely cautious, with no sign of this slowing down, and quite often this means buyers are needing to either find extra cash which isn’t available or attempting to renegotiate the price, which is particularly difficult right now.”

However, Mark Hansard from First Financial says “I do think we’ll see an approval uplift, yes. We are in a period now where people have accepted slightly higher rates. I don't think we will see the rates of 0.85% - 1.5%, for a long time. There is a lot of stock on the market at the moment with Buy-To-Let landlords selling off some of their portfolios so a great chance for first time buyers to get on the ladder.”

Question 2 – Have you spotted any Mortgage Approval patterns across specific regions?

Ben Grey from CHN Financial Consultancy says “I would not necessarily say this is region based, but I am certainly finding those areas whereby house prices have been slightly inflated over the past few years are having stricter valuations placed upon them, which is your higher value areas.”

Question 3 - Have you spotted any Mortgage Approval patterns based on property type?

Wayne Hill from M&G Mortgages says: “Of the transactions we have done, more people do appear to be turning to flats than houses.”

Question 4 - Have you spotted any Mortgage Approval patterns based on first-time or second-time buyers?

Wayne Hill from M&G Mortgages says “Of the approvals we have done, more are of first-time buyers than second-home movers. I feel that those currently with ownership are wary of the big next step up. Doubling their mortgages at a time when rates are also doubling from what they are used to is playing hard on second time movers.”

Mark Hansard First Financial discusses the ‘new normal’ by saying “Some lenders offer an increased income multiple if earnings are over a certain amount, and some lenders are increasing how much clients can put on interest only, if there is a suitable repayment vehicle in place. I don't think it's a bad thing if first time buyers are getting used to rates between 3%-4.5%.”

Open Property Group who specialize in helping homeowners sell their houses fast regardless of the economic climate believe that “Despite the ongoing market uncertainty, there seems to be a clearer understanding as to what will become the ‘new normal’ (in terms of interest rates) from now, compared to 12 months ago. Opinions differ but, fluctuating market conditions suggest a more bearish than bullish outlook.”

You can find the full Expert Commentary Q&A on: https://www.openpropertygroup.com/landlord-hub/uk-mortgage-approvals/ 

About Open Property Group

Open Property Group is a professional house buying company that helps people sell their properties quickly. They buy all types of properties (including vacant or let), throughout England and Wales.

Open Property Group specializes in buy to let property purchasing, which suit landlords who want to cash in property quickly without disrupting the tenants.

Homeowners benefit from selling their houses fast. By selling directly, you pay no agent fees, ‎and can plan ahead with certainty. We also pay your agreed legal costs too.

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