Mortgage market could be on the road to recovery

UK, 2 April 2024: 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. 

“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.” 

Below are four tips to help prepare your finances if you’re considering getting on the property ladder in 2024:  

1. Check your credit score and consider how it can be improved: Reducing any outstanding debt could boost your credit score. If you’re very close to the limits on your credit cards, reducing the balance could help improve your score. And if you haven’t already, registering on the electoral role can also help. 
2. Minimise credit applications: Refrain from applying for new credit accounts in the months leading up to your mortgage application. Multiple applications can negatively impact your credit score.
3. Cut back on spending, where you can: Lenders may go through your expenses in detail for the three months before you apply for a mortgage, calculating how much of your disposable income you spend to ensure you can manage monthly repayments. 
4. Do your research: Organise your paperwork in advance of an application, including payslips and bank statements, to help streamline the process. It’s also worth using comparison sites, like Experian, to search for mortgage deals you’re more likely to get, without affecting your score. You could also consider a free mortgage broker, such as L&C Mortgages, for expert guidance.

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Notes to Editors: 

All data referenced is from Experian’s bureau analysing mortgage applications from 2019 – March 2024. Analysis includes data from regions across the UK based on the old NUTS level 3.

Media contact: 

Brands2Life for Experian 

Tel: 0207 592 1200 / Email: experian@brands2life.com

About Experian 

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