Interest rate cuts drive steady recovery in housing market
Mortgage approvals across the UK are on track to surpass 780,000 this year, according to new analysis from mortgage adviser Alexander Hall.
The firm’s review of Bank of England data indicates that monthly approvals so far in 2025 are at their highest average since 2021. The analysis also shows that an average of 65,119 mortgage approvals have been recorded each month this year, marking a 4% rise on the 2024 monthly average.
These figures follow a 31% year-on-year increase from 2023 to 2024, suggesting sustained growth in borrower activity.
Although still below previous peaks, Alexander Hall projects that approvals could reach 781,429 by year-end if the current pace continues. The firm earlier said mortgage approvals could rise by 13.4% in 2025, marking the highest yearly total since 2021.
“The mortgage sector has been benefiting from improving consumer sentiment since the Bank of England first put a hold on interest rates back in September 2023,” said Stephanie Daley (pictured), director of partnerships at Alexander Hall. “This momentum has only grown stronger following the four cuts that have materialised since.
“As a result, we’ve seen consistently positive growth in mortgage approval numbers over the course of the last year, and it’s apparent that this trend has continued into 2025.
“Of course, we’re yet to see the market return to full strength when comparing current activity to previous historical highs, but it’s also important to note that while there have been improvements to market affordability by way of stronger earnings growth, the nation’s homebuyers are facing a considerably tougher task in today’s market.
“Despite these challenges, we’re on course to see total mortgage approvals exceed the 780,000 threshold this year, which demonstrates that buyer appetites are very much alive and well in today’s market.”
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