The Bank of England's recent reports indicate a resurgence in the UK housing market, with mortgage approvals for home purchases increasing in October. The number of mortgages approved reached 47,400, a notable recovery from the previous month's low, while remortgaging figures also climbed to 23,700. This uptick in activity comes despite the effective interest rate holding steady at 5.25%.
The stabilization of mortgage rates has been a contributing factor to the rise in approvals. Fixed-mortgage costs have eased slightly, reflecting greater market stability and improved conditions for borrowers. This shift has been accompanied by a decrease in consumer credit net borrowing, which fell marginally to £1.3 billion, and a significant increase in household savings. Banks and building societies saw deposits surge to £4.6 billion, the highest since the previous year, indicating a cautious approach to spending and an adherence to the Bank's monetary policy goals.
Despite the lack of stamp duty concessions from the Autumn Statement, borrowers have shown increased confidence, likely encouraged by the availability of accessible sub-4.5% five-year fixes. The housing market is currently navigating through a challenging economic climate with high-interest rates and uncertainty, yet demand remains strong due to limited availability and increased rental costs.
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