The number of mortgage approvals fell to 46,100 in November, down from 57,900 in October, new figures published by the Bank of England (BoE) have shown.

This latest total is the lowest since June 2020 when monthly approvals reached just 40,500.

Approvals for remortgaging, which the BoE stated only captures remortgaging with a different lender, also fell in November to 32,500, down from 51,300 in October. This was also down on the previous six-month average of 48,100.

According to he BoE’s data, net borrowing of mortgage debt by individuals increased from £3.6bn to £4.4bn in November. Furthermore, the figures show that gross lending decreased from £27.7bn in October to £25.7 billion in November, while gross repayments dropped from £25.8bn to £21.6bn.

Commenting on the Bank’s figures, CEO at LiveMore Capital, Leon Diamond, said: “It has been an up and down market for both net and gross lending in 2022 but mortgage approvals are now firmly on a downward slide.

“Mortgage approvals for house purchases decreased to 46,100 in November, down from 74,400 in August - a 38% fall in just three months – and the lowest level since June 2020. As approvals are an indicator of future lending this give a clear indication of which way the mortgage market for house purchase is going.
 
“If the Bank of England continues to raise the base rate, mortgage lending will decline this year. With the high cost of living and high inflation, more people will be forced to put any home moving plans they have on hold.”

The BoE also published new figures for the consumer credit market. The data revealed that individuals borrowed an additional £1.5bn in consumer credit in November, on net, following £700m of borrowing in October. This latest total for November was higher than the previous six-month average of £1.1bn.

According to the figures, the additional consumer credit borrowing in November was split between £1.2bn on credit cards, which increased from £400m in October, and £300m through other forms of consumer credit, such as car dealership finance and personal loans.

The annual growth rate for all consumer credit was little changed at 7.0% in November. The annual growth rate of credit card borrowing rose from 11.5% in October to 12.2% in November, while the annual growth rate of other forms of consumer credit decreased slightly from 5.0% in October to 4.8% in November.

“Total borrowing, including personal loans and car finance, more than doubled from £700m in October to £1.5bn in November,” commented head of personal finance at AJ Bell, Laura Suter.

“These figures will inevitably climb again once December’s numbers are revealed, as a large chunk of the cost of Christmas is put on plastic.

“On top of that, we saw a big leap in personal loan costs, with the average rate rising to a five-year high, increasing to almost 8%. It means those who are pushed into borrowing are being hit with higher costs, which will mean more face a debt spiral as they struggle to keep up with repayments.”

Share Story: