Mortgage approvals have bounced back to their highest point since last September, according to the Bank of England. This suggests the property market could be heating up again.

62,000 mortgages were approved in July, up from 60,600 in June. That’s the highest number since September 2022, when 65,100 approvals were recorded.

This surge in approvals has been linked to falling interest rates. The Bank of England cut the base rate at the start of August, making it cheaper for banks to borrow money and potentially leading to lower mortgage rates.

More buyers borrowing more money

It’s not just the number of mortgages being approved that’s on the up. The amount of money people are borrowing is also increasing.

In July, £2.8 billion was borrowed on mortgages, the largest sum since November last year. This suggests buyers are feeling more confident and are willing to take on bigger loans.

Experts optimistic about the future

Alice Haine, a personal finance expert, believes the recent interest rate cut, along with the possibility of further cuts in the coming months, will encourage even more buyers and sellers to enter the market.

“Improving mortgage rates and robust wage growth have eased the affordability challenge for some buyers in recent months,” she says.

Key figures:

• 62,000 mortgage approvals in July – the highest since September 2022
• £2.8 billion borrowed on mortgages in July – the highest since November 2022
• 4.81% the ‘effective’ interest rate on new mortgages in July

While mortgage rates are still higher than they were before the pandemic, the recent surge in approvals and lending is a positive sign for the property market. It suggests that, despite the challenging economic climate, people are still keen to buy and sell homes.