The number of mortgages approved reached a near two-year high, according to Bank of England figures, as hopes of cheaper borrowing encouraged would-be buyers.
Mortgage approvals increased to 62,000 in July, a level not seen since September 2022, a sign that buyers were waiting for hopes of reduced interest rates and the associated lower mortgage bills.
Since September 2022 borrowing rates soared, kicked off by chaos in mortgage markets prompted by the Liz Truss mini-budget.
Money blog: NatWest customers unable to make payments
It was early in August that the first interest rate cut in four years was made.
Similarly, the amount of money borrowed to buy a house topped a level not seen in 18 months. Cheaper borrowing makes properties more affordable for prospective purchasers.
Please use Chrome browser for a more accessible video player
Borrowing costs are still far higher than before the pandemic with the typical interest rate on newly drawn mortgages at 4.81%, Friday’s Bank data showed. Before the cycle of interest rate hikes, ultra-low mortgage rates of 1% or 2% were available.
Housing market demand surges following interest rate cut
House prices up as rate cut provides ‘encouragement’ for months ahead, Halifax says
Mortgage market ‘robust’ ahead of Bank of England interest-rate decision
Signs of confidence
Appetite for borrowing was also seen in other areas of the Bank’s data, demonstrating a growing desire to spend and expanding consumer confidence.
Credit card debt rose as households possibly spent on holidays or summer activities during the school break.
Keep up with all the latest news from the UK and around the world by following Sky News
The cost of this borrowing rose, however, climbing to 21.28% for credit card debt and 22.56% for interest-charging overdrafts.
Elsewhere data from the UK’s largest building society showed house prices were growing at the fastest annual rate in nearly two years.
