Mortgage rates have inched down, boosting affordability for some borrowers.
According to the Bank of England, the number of mortgage approvals for both homebuyers and remortgagors has risen by over eight per cent.
It noted that approvals for house purchases rose from 43,700 in September to 47,400 in October, while net approvals for remortgaging increased from 20,600 in September to 23,700 in October.
The Bank added that gross lending fell from £18.1 billion in September to £16.2 billion in October.
Alice Haine, personal finance analyst at Bestinvest, said the rise in net approvals (which is an indicator of future borrowing) reflects “improving market conditions for buyers with mortgage rates easing and house prices softening as sellers face increasing pressure to accept lower prices”.
She added: “As more buyers return to the market buoyed by the prospect of better deals and a higher chance of meeting affordability criteria, hopes will be raised that stability is returning to the market.”
Karen Noye, mortgage expert at Quilter, added: “As we navigate through a challenging phase in the housing market, there are subtle signs suggesting we might be slowly emerging from the worst of the turmoil.
“However, it’s clear that we’re not completely out of the woods yet. The latest data reflects that while net mortgage approvals for house purchases have ticked upwards to 47,400 in October, from the low of 43,300 in September, the market remains cautious.”
The Bank of England also noted that the ‘effective’ interest rate – the actual interest paid – on newly drawn mortgages saw a 24 basis point increase to 5.25%.