London's property market is showing signs of renewed vigour as mortgage lending surged to its highest level in seven months during October, according to the latest Bank of England data.
The figures reveal a significant uptick in borrowing activity, with net mortgage approvals for house purchases climbing to 47000 last month – marking the strongest performance since March and comfortably exceeding economists' predictions of 45000.
Pre-Budget Rush Fuels Market Activity
This unexpected surge appears driven by borrowers scrambling to secure favourable mortgage deals ahead of the Chancellor's Autumn Statement, creating a mini-boom in lending activity. The data suggests homeowners and buyers are acting decisively amid speculation about potential changes to property taxation and lending regulations.
"What we're witnessing is a classic case of pre-policy anticipation," commented one financial analyst. "When significant fiscal announcements loom, property buyers tend to make their move rather than risk facing less favourable conditions afterwards."
Remortgaging Sees Even Stronger Growth
While purchase approvals showed healthy growth, the remortgaging sector experienced an even more dramatic increase. Approvals for remortgaging jumped to 39000 in October – a notable rise from September's 30000 and the highest figure recorded since July 2022.
This suggests that existing homeowners are actively seeking to lock in new deals, possibly anticipating further interest rate volatility or responding to recent stabilisation in borrowing costs.
Broader Economic Context
The mortgage lending revival forms part of a broader picture of economic resilience. Consumer credit also saw an uptick, increasing from £1.1bn in September to £1.3bn in October, while effective interest rates on new mortgages actually decreased slightly to 5.25%.
However, it's not all positive news. Approvals for larger loans secured on dwellings decreased to £100m, down from £200m the previous month, indicating continued caution around high-value property investments.
The coming months will reveal whether this mortgage lending surge represents a genuine market recovery or simply a temporary spike driven by budgetary uncertainties. All eyes now turn to how the Autumn Statement might reshape the property landscape for the remainder of 2023 and beyond.
