Mortgage approvals for home purchases fell from 56,100 in July to 54,900 in August compared to 60,100 in the previous six months.
The lack of activity in the mortgage market is partly due to the seasonal effect of the August holidays, which this year saw temperatures higher than normal.
But it was also the impact of economic and geopolitical uncertainty that prevented buyers and sellers from taking action.
And then there he was Mortgage rates rise For consideration. In fact, the report also revealed that the average new mortgage rate rose from 4.45% in July to 4.6% in August.
Sarah Coles, head of personal finance at AJ Bell, explained what happened. “The mortgage misery we are feeling now started in early August, with the first rate hike since April,” she said.
“This shift was triggered by mounting concerns about continued conflict in the Middle East, and the impact of higher oil prices for a longer period. More inflation began to be priced into markets, so bond prices fell and yields rose.
“Bond yields feed into the swap market, where mortgage rates are set, so this started to push fixed interest rates higher. The pain has not eased since.”
Why might this be good news for first-time buyers?
Coles explained that fewer mortgage approvals can lead to slower sales, and this can provide an opportunity for first-time buyers because it puts them in a strong position to negotiate. There’s extra room to maneuver House price growth Very slow at the moment.
Coles continued: “It’s easy to rush when you’ve fallen in love with a property, but it’s worth taking your time, making sure you’ve made the most of your lifetime ISA bonus, and pushing for the best possible deal.
“The future of house prices is uncertain, so the harder you act now, the better protected you will be if the market falters.”
The news comes just days after Premier Andy Burnham announced he would introduce a new first-time buyer support scheme – Your first home. It is aimed at those purchasing a new property, thus adding an additional route to home ownership for anyone trying to get on the property ladder.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “It is hoped that the government scheme being introduced in the Budget will give the sector some welcome incentive, and encourage first-time buyers – who are hugely important to the overall health of the market – to make a move.”
