Tech Trends

Mortgage approvals reach highest level since 2007 thanks to interest rate cut

Apr 8, 2026

Mortgage approvals experienced a significant 18 per cent increase year on year in January, buoyed by interest rate cuts that have made borrowing more affordable. Data from the ONS revealed that mortgage approvals reached 66,189 in January, marking an 18 per cent rise from 55,941 in the same month of the previous year, as reported by City AM. "UK homebuyers appear to have begun the year on the front foot," commented Jonathan Samuels, CEO of specialist lender Octane Capital. He further noted, "The general consensus is that affordability should continue to improve as the year progresses, further fuelling the consistent momentum that has been building over the last 12 months." Despite the annual rise, there was a slight 0.5 per cent decrease in approvals month on month, down from 66,505 in December. However, Samuels dismissed concerns about this dip: "A momentary monthly dip in mortgage approval numbers is to be expected either side of the Christmas break and so the marginal decline seen in January certainly doesn't suggest the market is running out of steam," he explained. Jason Tebb, President of OnTheMarket, added his perspective, stating: "Further reductions from the Bank of England would provide a welcome shot in the arm for the market, particularly with the stamp duty concession ending this month." Analysts at Capital Economics anticipate the Bank of England will lower interest rates to 3.5 per cent by early 2026. Meanwhile, the market seems to be 'shrugging off' concerns related to stamp duty, as the relief for first-time buyers is set to end on April 1, prompting many to hasten their purchases before the deadline. Analysts have raised concerns that the current demand from first-time buyers may be obscuring the true condition of the housing market, which is still grappling with affordability issues despite recent lower interest rates. Jeremy Leaf, a north London estate agent and former RICS residential chairman, commented that the market appears to be "shrugging off" worries related to the stamp duty holiday concession. "These figures provide further evidence of the resilience and underlying confidence in home buying, setting the tone for activity over the next few months at least," he said. Stephanie Daley, Director of Partnerships at mortgage advisor Alexander Hall, remarked that the stamp duty deadline is "not the predominant factor fuelling the market at present."