Mortgage approvals soar as buyers rush before budget changes
- In October 2023, mortgage approvals reached their highest level in over two years, at 68,300, surpassing expert expectations.
- A notable increase in remortgaging activity was also observed, with 31,400 homeowners switching lenders amidst changing economic conditions.
- The surge in mortgage activity reflects buyers' and sellers' efforts to conclude deals before anticipated tax increases in the upcoming budget.
In the UK, a significant surge in mortgage approvals marked October 2023, with 68,300 mortgages sanctioned, the highest figure seen since August 2022. This increase was noted as buyers and sellers hurried to finalize their property deals in anticipation of forthcoming tax hikes, particularly changes to stamp duty and capital gains tax expected in the budget announcement by Rachel Reeves. The Bank of England reported that this figure surpassed expert forecasts, where predictions had estimated approximately 64,500 approvals. Additionally, the trend of homeowners remortgaging persisted, reaching 31,400 approvals in recent months, as they sought better terms or more favorable lenders amidst shifting market conditions. Analysts, such as Elliott Jordan-Doak from Pantheon Economics, highlighted that behavioral patterns reflected heightened concerns regarding potential increases in taxation, driving the urgency within the housing market. This pre-budget activity indicates that many buyers aimed to secure properties before the expected budget releasement, with hopes of avoiding potential financial burdens impacting their purchases. Economic indicators signal that as the deadline for stamp duty relief draws near in April 2024, similar trends may continue, keeping pressure on the housing market as more individuals look to navigate these uncertainties before official announcements are made.