UK homeowners warned over remortgaging ‘before August or September’

People who hold a mortgage have been handed a two-year boost – with the number of approvals now soaring to the highest since 2022. The number of mortgage approvals made to home buyers jumped in March to the highest level since September 2022, according to Bank of England figures.

In an indication of property sales to come, mortgage approvals for house purchases rose from 60,500 in February to 61,300 in March. It was the highest total since more than 65,300 mortgages for house purchase got the green light in September 2022.

But approvals for remortgaging decreased from 37,700 to 34,200 over the same period, according to the Bank of England’s Money and Credit report. But despite the blow to people looking to remortgage, they’re being told to potentially renegotiate from August.

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Sarah Coles, head of personal finance, Hargreaves Lansdown, said: “Rate cuts will come eventually. They’re currently being pencilled in to start in August or even September, although June still can’t be ruled out. Two or three cuts are expected to kick in during 2024. This will finally bring lower monthly payments for those who switched to variable deals, and will mean slightly lower rates for those looking for a new fixed rate.

“However, it’s a far cry from earlier in the year when markets were expecting rates to have been cut already – and for anything up to five cuts during the year. It means mortgage deals may not move as far or as fast as buyers were hoping.” Tom Bill, head of UK residential research at Knight Frank, said: “A wave of owners rolling off sub-2% mortgages agreed in early 2022 is adding to the financial pressures in the system.

“Demand will strengthen as more sub-4% mortgages reappear, which will only happen when services inflation heads closer to the Bank of England’s 2% target, which means there should be a more obvious seasonal bounce in activity this autumn.”

Debt help charity StepChange’s chief client officer Richard Lane said: “It’s encouraging to see rising mortgage approvals and increased use of credit, which in part will reflect growing consumer confidence. However, for many others, the increased use of consumer borrowing may reflect more difficult circumstances, with our recent polling estimating that one in six people – 8.6 million UK adults – has recently borrowed to keep up with essentials.”