The level of mortgage approvals across the UK property market is expected to dip in 2022.

According to market analysis from Octane Capital, this will be driven by a -13.4% reduction in buyer demand for residential house purchases.

Octane Capital’s analysis of Bank of England mortgage data has estimated where the market will sit come the end of the year, how this compares to market performance over the last decade, and which sectors are driving current market trends.

Based on this data, Octane Capital said it is expecting the total level of mortgage approvals across the UK property market to reach 1.57 million by the end of 2022, averaging 130,764 per month. 

This level of total market activity would mark a -0.2% decline when compared to 2021, although when dissecting the market by the type of mortgage approval, Octane Capital stated that there is one sub sector driving this decline. The analysis revealed that mortgage approvals for residential house purchases specifically are set to fall to a total of 818,641 in 2022, equivalent to a drop of -13.4%.

While this market performance is expected to stutter in 2022, Octane Capital added that the total level of mortgage approvals across the UK will still remain 2.8% higher than they were five years ago, and 36.3% above the level seen in 2012. 

“We predict that 2022 will see a very marginal decline in top line mortgage approvals and, at first glance, this suggests that the sector will have weathered the rather ferocious storm that has broken in recent weeks,” Octane Capital CEO, Jonathan Samuels, commented. “However, when dissecting the market by type of mortgage approval, it’s clear that the damage done to the residential market has been far more pronounced.

“In fact, we expect to see mortgage approvals for house purchases take a notable dip come the end of this year. This is due to the recent turbulence seen across the mortgage market, with growing uncertainty and an increased cost of borrowing deterring many buyers from progressing with their purchasing plans. 

“At the same time, we’ve seen many existing homeowners rush to remortgage in order to secure a favourable rate before any further increases materialise, as well as an uplift in those borrowing more on their existing mortgage, with both areas of the market bringing a degree of stability where total mortgage approval levels are concerned.”

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