Mortgage approval totals to fall sharply this year

It won’t come as a surprise that forecasts show mortgage approvals will fall this year.

But a new analysis says the drop could be as much as 11 per cent.

Octane Capital analysed historic mortgage approval data to compare with 2023 so far, in a bid to forecast a full-year out turn.

The latest figures show that 54,662 mortgages approved in June of this year, not only marking a seven per cent increase on the previous month but the second consecutive month approvals have climbed.

Current mortgage approvals levels also sit some 37 per cent above the market low of 39,825 seen in January of this year.

But even with recent positive growth considered, the number of mortgage approvals seen during the first six months of this year totalled just 291,578, some 29 per cent less than the 410,244 approvals seen during the first half of 2022.

Octane Capital has extrapolated the recent months’ figures and is forecasting that monthly approvals could hit 69,034 by December of this year.

This would signal a return to the previous highs of last year before September’s mini budget, and could see the total number of mortgage approvals seen during the second half of 2023 hit 377,927 - a 30 per cent increase versus the first six months of the year.

However, despite this late rally during the second half of 2023 the total annual mortgage approvals are estimated to sit at 669,550 come the end of the year.

This would mark an 11 per cent year on year decline, following 2022 which also saw total mortgage approval levels fall by 20 per cent versus the previous year.