The number of mortgage approvals for home-buyers rose to a fresh two-year high in September, as borrowing costs continued to come down, new Bank of England figures have shown.
Some 65,600 loans were approved last month, 700 more than in August.
It marked the highest level since August 2022, when about 72,000 were given the green light.
Approvals for remortgaging also jumped by 3,100 to 30,800 in September, according to the Bank’s monthly Money and Credit report.
The latest figures come after the Bank of England cut UK interest rates to 5% in August, the first reduction since the pandemic.
Alice Haine, personal finance analyst for Bestinvest by Evelyn Partners, said: “Lower inflation, improving borrowing conditions and robust income growth have eased the affordability challenge for many buyers in recent weeks following the Bank of England’s decision to make its first interest rate cut since the start of the pandemic.”
She said the prospect of another interest rate cut this year is “likely to catalyse the property sector even more”, but added that buyers, sellers, home-owners and landlords are “now on tenterhooks” ahead of the Budget statement on Wednesday.
Chancellor Rachel Reeves is reportedly considering bringing a stamp duty discount introduced by the previous Conservative government to an end, as part of efforts to raise more cash for the Treasury.
At the same time, households deposited an extra £8.2 billion into banks and building societies last month, including an additional £3.9 billion into Isas (individual savings accounts).
Ms Haines said the increase reflects people “loading up” savings accounts and tax-efficient options with extra cash as they “batten down the hatches” ahead of potential tax increases on savings and investments in the Budget.
“There has been a sense of urgency in the run-up to the Budget, with many savers treating October 30 like the end of the tax year,” she added.