Property experts encouraged by 'green shoots' as mortgage approvals rise

Green shoots may be appearing in the housing market, some experts have suggested, as Bank of England figures showed home-buyer mortgage approvals edged up for the first time in six months in February.

Some 43,500 mortgages were approved for house purchase in February, up from 39,600 in January. This marked the first monthly increase since August 2022, according to the Bank’s Money and Credit report.

The “effective” interest rate – the actual interest rate typically paid – on newly drawn mortgages increased to 4.24% in February. Karen Noye, a mortgage expert at Quilter, said: “Some green shoots might be appearing as, in February, approvals for house purchases showed a rebound, rising to 43,500 in February from 39,600 in January…

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“However, the effective interest rate on newly drawn mortgages increased by 36 basis points to 4.24% in February, making borrowing more expensive for potential home-owners and will likely still continue to mean approvals are depressed as people adopt a wait-and-see approach, at least in the short term.

“However, it’s clear that home-buyers are cautiously returning back to the market in early 2023 after the huge shocks at the back end of last year made many put their house hunts on ice. How this all feeds through to house prices is yet to be seen.”

Jason Tebb, chief executive of property search website OnTheMarket.com, said: “The uptick in approvals for house purchases for the first time since August 2022 suggests that the uncertainty around the mini-budget fallout, rising interest rates and inflation has calmed to an extent.

“Looking forward, consumers may feel less confident in the short