According to the Bank of England, the number of mortgage approvals for home purchases fell by 2,400 from the previous month to 65,700 in November.
However, the central bank noted in its latest Money and Credit Report that this figure was still above the 12-month average of 60,400. 
The number of remortgages to new lenders fell by 300 in November to 31,200, but remains above the 12-month average of 30,000.
The research added that mortgage borrowing fell by £1bn to £2.5bn in November, after net borrowing increased by £1bn in October.
The annual growth rate of mortgage lending rose from 1.1% in October to 1.3% in November, continuing an upward trend since April 2024.
The report added that total loans increased from £20.3bn in October to £20.7bn in November, with “total repayments remaining little changed at £18bn in November”.
The “effective” interest rate (the actual interest rate paid) on new mortgages fell by 11 basis points in November to 4.5%, the lowest level since April 2023.
The data comes after Bank of England Governor Andrew Bailey last month predicted four “gradual” cuts of 0.25% next year, lowering the benchmark interest rate to the current 4.25%. The announcement came after the government announced that it would raise the rate from 75%.
The Bank of England cut interest rates by 0.25% twice last year, but inflation currently stands at 2.6%.
Mark Harris, chief executive of SPF Private Clients, said: “The decline in new mortgage purchase approvals was a surprise and suggests more ups and downs in the market over the coming months rather than a steady improvement. “I am doing so,” he said.
“Refinance numbers have fallen slightly, but this may mean more borrowers are sticking with their existing mortgage provider rather than switching to a new lender.
“The effective interest rate paid on new mortgages has fallen again to 4.5%, as the then low pricing is now reflected in the official figures.Many financial institutions have reduced their rates this week, with others also If they follow suit, rates could fall further in the coming months.”
Tomer Aboudi, director of MT Finance, points out: “The decline in net home loan approvals, which have been rising for several months, shows that consumer confidence has likely taken a hit post-Budget and that nothing should be taken for granted.
“Further rate cuts expected in the new year should help boost these numbers and get us back on track.
“Despite lower borrowing rates, we still live in an environment where costs are higher than most people are accustomed to.
“Sellers may try to charge a premium because of the high cost of everything, but buyers are likely to decide they are not prepared to pay that.”
Nathan Emerson, Chief Executive Officer of Propertymark, added: “The impact of rising interest rates is undoubtedly having a significant impact on the overall housing market.
For consumers to engage in the buying and selling process, they need to have a degree of confidence in their financial situation, and maintaining long-term stability for the economy as a whole requires that aspects such as inflation are well controlled. is essential and necessary for a healthy and safe life. housing market.
“Propertymark hopes to further reduce interest rates when conditions permit, in order to foster growth in 2025.”
