Mortgage lending has hit a two-year high - but Budget could 'topple the apple cart'

Morgage lending has hit a two-year high amid further signs of recover in Britain’s housing market. Bank of England data showed there were 64,900 home loan approvals in August, despite summer normally being a quiet month given many people being away on holiday. The figure was up from 62,500 in July and the highest level since August 2022.

Similarly, approvals for remortgaging increased from 25,200 to 27,200. Experts said the uptick was boosted by the Bank of England cutting its base rate to 5% at the start of August, although the full impact of that - and future predicted cuts - will take some time to feed through. The Bank of England figures showed a net £2.



9billion worth of mortgage lending - after taking account of repayments - in August, up from £2.8billion in July. It came as a separate report from the Nationwide Building Society suggested the average UK house price rose by 0.

7% - to £266,094 - between August and September alone. Prices growth on an annual basis jumped from 2.4% to 3.

3% - the fastest pace since November 2022. Tom Cuppello, from financial services consultancy Broadstone, said: “Off the back of falling mortgage rates and increasing house prices , this latest Bank of England confirms that confidence appears to be returning to the property market.” Thomas Pugh, economist at audit, tax and consulting firm RSM UK, said: “The housing market is reviving, and will continue to improve over the next year, and into 2025.

” Katy Eatenton, mortgage and protection specialist at Lifetime Wealth Management, said: “August was the busiest month of the year so far, with September following closely behind. “Regular rate reductions from lenders are definitely helping drive demand and the rush to purchase before the rise in stamp duty is also a driver of activity. “The only apple that could possibly topple the cart is the impending Budget at the end of the month.

Everyone is praying there isn’t a repeat of the disastrous mini-Budget of 2022.” Jeremy Leaf, a north London estate agent and a former residential chairman at the Royal Institution of Chartered Surveyors, said: “Buyers are emerging from summer hibernation to take advantage of cheaper mortgages with the prospect of more to come, as well as an increasingly-settled economic and political background. “Looking forward, improved property choice and worries about the ‘painful’ Budget in just over four weeks means prices will not increase rapidly as part of an increasingly settled period.

”.