Sinking mortgage approvals suggest fewer moving out of rentals

The number of mortgage approvals for house purchases in November came to 46,075 according to the Bank of England.

The 46,075 figure for November 2022 is down from 57,875 in October, and reflects the impact of higher interest rates deepening demand - this is likely to include tenants who have decided to stay in rental accommodation for longer.

That’s the lowest number seen since June 2020, when there were 40,530, and compares to 68,969 approvals made a year ago, in November 2021.

Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “Mortgage approvals are always a good indicator of future direction of travel for the housing market. On the ground over the past few months, we have been seeing buyers trying to take advantage of mortgages arranged at lower rates, while others try to come to terms with higher repayments, as evidenced in this survey.

“However, we have noticed many holding back until the early new year to check if mortgage rates really are stabilising before deciding to move. The equity-driven are certainly faring better than more-heavily mortgaged first-time buyers, who are also being squeezed by higher rents.”

Housing market analyst and PropTech entrepreneur Anthony Codling comments: “This was a big drop. Mortgage approvals fell by 11,800 in November 2022 the biggest fall since April 2020 and are at their lowest level since June 2020. This is not the news the housing market was hoping for in the first week of the new year. 

“Mortgage approvals are the key lead indicator for housing transactions, lower mortgage approvals today means fewer housing transactions tomorrow. A reduction in housing transactions will hurt all those businesses that are involved in the home-moving process, but the absence of forced sellers implies that house prices will not fall as far or as fast as housing transactions.”