Mortgage Approval Totals Braced For Double Digit Fall in 2023

A new analysis suggests that mortgage approval levels will decline by 11 per cent annually come the end of 2023.

Octane Capital analysed Bank of England historic mortgage approvals looking at how the market is currently performing, as well as where it may stand come the end of the year. 

The latest figures show that 54,662 mortgages approved in June of this year, not only marking a seven per cent increase on the previous month but the second consecutive month approvals have climbed. 

Current mortgage approvals levels also sit some 37 per cent above the market low of 39,825 seen in January of this year. 

But even with recent positive growth considered, the number of mortgage approvals seen during the first six months of this year totalled just 291,578, which is 29 per cent less than the 410,244 approvals seen during the first half of 2022. 

The good news is that this uplift in mortgage approval market activity is set to strengthen, with Octane Capital forecasting that monthly figures could hit 69,034 by December of this year.

This would signal a return to the previous highs of last year before September’s mini budget rocked the boat and could see the total number of mortgage approvals seen during the second half of 2023 hit 377,927 - a 30 per cent increase versus the first six months of the year.

However, despite this late rally during the second half of the year, total annual mortgage approvals are estimated to sit at 669,550 come the end of the year. 

This would mark an 11 per cent year on year decline, following 2022 which also saw total mortgage approval levels fall by a fifth versus the previous year. 

Octane chief executive Jonathan Samuels says: “The upward trajectory of interest rates and the resulting reduction in buyer activity are expected to see total mortgage approval levels dip for a second consecutive year in 2023.

“That said, it would seem that the worst is behind us and we are now starting to move away from the market lows seen earlier this year, with positive growth expected to materialise over the remaining six months. 

“While this short-term positivity won’t be enough to bring about an annual increase in total mortgage approvals, it does set a very firm foundation for further positive growth in 2024.”