Bank of England data shows that mortgage approvals in April fell 3,100 to 60,500 in April, the third consecutive month of decline.
The data comes after the stamp duty changes occurred in the Ministry of Finance at the end of March, including the Neal rate to £125,000 starting from £250,000, which reversed the September 2022 mini budget.
However, the latest currency and credit report from the central bank showed that re-loan approvals rose by 1,600 to 35,300 in April.
However, net mortgage lending “sharply declined” to £13.7 billion in April after borrowing increased by £9.6 billion in March.
Net mortgages’ annual growth rate fell to 2.5% from 2.7% in April.
Aaron Milburn, managing director of Pepper Advantage UK, said: “The decline in mortgage approvals in the UK for the third straight month has shadowed the outlook for early 2025 and has prompted a renewed call for financial conduct authorization to reevaluate current lending regulations.
“While recent reductions may provide some relief to existing borrowers, the data highlights the ongoing market struggle against economic uncertainty. Continuing high inflation and wider macroeconomic pressures continue to undermine expectations for further rate cuts, keeping the mortgage market in an extended state.”
Zoopla executive director Richard Donnell added: “A slowdown in demand for mortgages in April reflects the impact of the late Easter period. We expect the mortgage data for May will increase with the consistency of new sales, the highest level in four years.
“A key factor is also the relaxation affordability test for lenders, which average home buyers have a whopping 20% borrowing capacity compared to a few months ago.
“We want June to be busy because buyers want to ensure sales before the summer break begins.”
Jeremy Leaf, a North London real estate agent and former RICS resident president, noted: “It is always a good indicator of future market activity, and the numbers for these mortgage approvals may have fallen, but it doesn’t tell the whole story.
“First of all, this change proves relatively modest, and buyers may be suspending but are continuing to act as they take advantage of lower repayments and larger loan-to-value mortgage utilization.
“Secondly, we won’t expect much change, especially as most people seem to have accepted that the base rate is unlikely to be lowered as expected.”
