The Bank of England has said mortgage approvals for house purchase rose 7% to 105,000 in November. That’s the highest number of approvals since August 2007. Hina Bhudia, Partner of Knight Frank Finance: commented “Mortgage lending showed no signs of slowing in November as borrowers that opted to reassess their housing needs during the spring lockdown worked their way through the buying process.
“The scale of activity has been unlike anything we’ve seen since before the Global Financial Crisis, and there are already signs that January will be hectic as buyers seek to lock in deals ahead of the end of the Stamp Duty Holiday at the end of March.
“The good news is that the banks are increasingly eager to lend and we have started to see major institutions return to lending to buyers with small deposits, in a boost for first time buyers. The bad news is that many banks still haven’t worked through a backlog of applications that built up during the lockdown and subsequent surge in activity during 2020, and will likely struggle to cope if activity picks up during the first months of this year.”
Whilst Islay Robinson of Ennis Global Mortgages stated “While many of us will have had a somewhat muted festive period, this certainly hasn’t been the case where the UK property market is concerned, with the latest figures showing the highest level of monthly mortgage approvals since August 2007.
This leading indicator of buyer appetite has been on an upward trajectory since May and demonstrates the huge influx of market activity seen since the market reopened. So although 2020 ended with a whimper, the market shows no signs of slowing just yet and this huge degree of momentum is certain to carry through to this year.
Of course, the fast approaching stamp duty deadline will dampen buyer demand to some extent. However, the availability of record low mortgage rates for those in a position to secure them should ensure demand remains robust beyond March which will bring long-term benefit to the market as a whole.”