According to new data from Experian, mortgage applications in the first two months of 2024 showed positive signs that consumers are returning to the market, with numbers increasing 20% against the same period last year.
The data shows that the market is still some way from pre-pandemic figures and many consumers remain hesitant, indicating that recovery “will likely be slow but does appear to be moving in the right direction as confidence grows.”
The picture differs significantly across the UK, “with several regions seeing more applications in January and February this year than in 2023.”
In fact, the regions with the biggest return “to market outside of London were West Cumbria (42%), Manchester (42%) and Edinburgh (40%) – all coming in substantially higher than the national average.”
Meanwhile, some of the lowest increases in applications “were the Causeway Coast and Glens (1%), the Isle of Wight (2%) and Caithness and Sutherland, and Ross and Cromarty (2%).”
John Webb, Experian Consumer Affairs Manager, says:
“It’s encouraging to see the start of a shift in consumer attitudes to mortgage applications. But the reality is that many people are still hesitant, as mortgage rates remain relatively high. What we are seeing is therefore likely the first green shoots of a long road to recovery and return to market – after the huge impact the pandemic has had on our economy. After nearly 2 years of interest rate rises by the Bank of England, taking the base rate from 0.1 percent at the beginning of December 2021 to 5.25 percent in August 2023, the rate has been steady at 5.25 percent for over six months. The recent stability in interest rates is likely why consumers are starting to feel more confident returning to the market, despite rates remaining the highest they’ve been in 16 years, and the Experian data shows many consumers do feel in position to buy.”
As noted in the update:
“It’s vital for people to ensure they’re well informed about their options so they feel confident when looking for the right mortgage deal, and that their finances are in the best possible shape to help their applications. This can feel daunting, but there are some steps you can take to greatly improve your situation. For example, it’s important to monitor your credit score and consider how it might be improved. Higher scores will indicate to lenders that you are a reliable borrower and can therefore help you secure the best deal out there. Which will save you money in the long-run.”