Mortgage Approvals for Home Buyers Decline in November: A Detailed Analysis
The Bank of England has reported a dip in the number of mortgage approvals for home buyers in November. Despite the decrease, the figures remained above the monthly average observed over the past year. In November, there were 65,700 mortgage approvals for house purchases, which was approximately 2,400 lower than October’s numbers but still higher than the previous 12-month average of 60,400. Additionally, approvals for remortgaging, capturing only those with a different lender, decreased by 300 to 31,200 in November, remaining above the previous 12-month average of 30,000.
Slowdown in Consumer Credit Growth
The annual growth rate for consumer credit borrowing also experienced a slowdown in November, dropping to 6.6% from 7.3% in October, as per the Money and Credit report. This category includes borrowing through credit cards, car dealership finance, and personal loans. Specifically, the annual growth rate for credit card borrowing decreased to 8.0% in November from 9.4%, while other forms of consumer credit saw a decrease from 6.3% to 5.9%.
Households’ Deposits and Savings Behavior
Households’ deposits with banks and building societies saw a slight increase of £0.2 billion in November, following a significant net deposit of £18.8 billion in October, the largest figure recorded since December 2020. Mark Hicks, head of active savings at Hargreaves Lansdown, noted that a post-Budget slowdown indicated a seasonal decrease in savings. Consumers had been saving more cash before the Budget, and the announcement not being as severe as expected led them to ease off on saving.
Expert Insights and Market Analysis
Laith Khalaf, head of investment analysis at AJ Bell, pointed out that the figures indicated consumers postponed their Christmas spending in 2024, especially with November being a crucial trading month due to events like Black Friday. He emphasized that weak Christmas trading could put additional pressure on retail finances ahead of impending cost increases. Looking ahead, Mark Harris, chief executive of SPF Private Clients, expressed surprise at the slip in mortgage approvals for new purchases, suggesting potential market fluctuations in the future.
Humanizing Touch:
Imagine saving diligently for months, only to realize you can’t afford the home you wanted due to changes in mortgage approvals. It’s a situation many potential buyers currently face, navigating the complexities of the housing market amidst economic uncertainties. As we enter a new year with shifting financial landscapes, finding ways to adapt and make informed decisions becomes crucial for individuals seeking stability and security in their investments. How can you adjust your financial plans to align with changing market conditions and ensure a smooth path towards your homeownership goals?
