The property industry has welcomed latest official figures that show mortgage lending for new purchases increased by 2,400 to 63,000 in May, the first it has gone up since December 2024.

In a further boost, the data, which comes from the Bank of England’s latest Money and Credit report, also shows that the cost of mortgages continues to come down, albeit slower than had been hoped.

The ‘effective’ interest rate – the actual interest paid – on newly drawn mortgages fell to 4.47% in May from 4.49% in April. Approvals for remortgaging have also risen, up by 6,200 to 41,500, which is the largest increase since February 2024 (6,600).

What agents say

Nathan Emerson, CEO of Propertymark

“It is incredibly positive news to see an increased number of mortgage applications approved. It is one of the loudest signals of them all regarding consumer affordability, and it is also a massive vote of confidence from lenders in the longer-term prospects of the economy too,” he says.

Stephanie Daley, Director of Partnerships at Alexander Hall

“Buyers are once again moving forward with confidence and, with interest rates showing greater stability and many lenders continuing to offer a competitive range of sub-4% mortgage products, conditions remain supportive for both first-time buyers and home movers,” she says.

Richard Donnell, Executive Director at Zoopla

“Mortgage approvals have increased for the first time in five months as increased sales agreed has boosted the demand for mortgages from home buyers. More homes for sale means more buyers and sales, ” he says.

“We expect demand for mortgages to continue to increase as more sales are agreed.

“The market remains on track for 5% more sales in 2025 with price inflation steady at 2%.”

Jason Tebb, President of OnTheMarket

“The market appears to be back on track with approvals for house purchases, an indicator of future borrowing, increasing for the first time since December. Market stability and buyer confidence continue to be steady, even though it is now too late to take advantage of the Stamp Duty holiday,” he says.

“With the rate on newly-drawn mortgages falling again in May, while the rate on outstanding mortgage stock rose slightly, overall there are signs that affordability continues to ease a little.

“Several base rate reductions since last August have helped, along with lenders easing criteria, but mortgage rates are still higher than many have grown used to in recent years.

Jeremy Leaf, north London estate agent and a former RICS residential chairman

“New buyers are still cautious about economic prospects here and abroad and are taking their time to appraise the much better choice of available properties, resulting in lengthening transaction times,” he says.

“But these numbers do not of course include the estimated 40 per cent of cash buyers who we have found are proving even more picky when it comes to agreeing terms.”

John Phillips, CEO of Just Mortgages and Spicerhaart

“Despite much doom and gloom following the change in Stamp Duty thresholds at the end of March, May’s rise in mortgage approvals – along with an increase in property transactions reported on Friday – shows any lull was likely only temporary,” he says.

“It certainly mirrors what we are seeing on the ground throughout our estate branches and the reports from our brokers, with strong demand for valuation requests, buyer registrations and mortgage appointments.

“The housing market continues to show real resilience – even in the face of stubborn inflation and some painful changes that came with the new tax year.”

Mark Harris, chief executive of mortgage broker SPF Private Clients

“With mortgage approvals rising for the first time this year, it’s a positive sign for the market,” he says.

“The effective interest rate paid on new mortgages fell slightly to 4.47 per cent in May and since then, we have seen some lenders trim their mortgage rates further. However, with the rate on the outstanding stock of mortgages rising slightly to 3.87 per cent, affordability remains a concern.

“Remortgaging numbers jumped by 6,200 in the month, suggesting that borrowers are keen to shop around for better deals even if it means the hassle of applying to another lender.”