UK Mortgage Approvals Soar To 13 Year High
The number of mortgage approvals in September 2020 rose to a 13-year high. The stamp duty holiday and pent-up demand in the housing market are combining to create significant demand in the property market.
Even though there is considerable uncertainty in the economy right now, it appears many people are keen to move home. With the chance to save up to £15,000 in stamp duty costs right now, it is easy to see why many people are busy now.
The Bank of England states the number of mortgages for house purchases approved in August 2020 was 85,500 and in September, this rose to 91,500. This stands in contrast with the predictions, with many specialists believing August would represent a peak and then approvals would dip.
People are looking to buy a home soon
The September 2020 approval numbers are the highest since September of 2007. If you are looking to compare the number of mortgage approvals with the figure before the March lockdown, the figure is 24% higher than the February 2020 approval numbers.
When it comes to house borrowing numbers, the August 2020 figure was £3bn and in September, the net mortgage borrowing rose to £4.8 billion. This is a significant leap, and it suggests many people are looking to move as soon as possible.
GetAgent, which monitors homebuyer demand across the UK on a quarterly basis based on market data from the major property portals, indicated there was an 8.5% rise in buyer demand in the third quarter of this year compared with the second-quarter.
Colby Short, founder of CEO of GetAgent, said: “The meteoric uplift in UK homebuyer demand in the third quarter of this year demonstrates a market that has well and truly bounced back from pandemic paralysis. More affordable areas were the strongest performing in terms of buyer demand in Q3, with plenty of room for further growth in some parts of the country.”
Colby continued: “It’s fair to say that the current stamp duty holiday in its various forms across England, Wales and Scotland has played a huge part in this revival and should continue to do so over the final quarter of 2020 at the very least. This is great news for home sellers who may have seen the value of their property plateau or even fall during the prolonged period of Brexit uncertainty that plagued the market over the last few years. With buyer demand now seeing a healthy increase, sold prices are likely to follow suit.”
Money was paid back in September too
In September 2020, people in Great Britain made net repayments of £600m. This means they repaid more money than they borrowed. In July and August of this year, borrowings were greater, related to falling borrowing rates during the lockdown period.
Simon French is the Chief Economist at Panmure Gordon, and he suggests this is a “first hard data signal that consumers are hunkering down for a difficult couple of quarters“. Therefore, it might be of benefit to keep an eye on this form of activity in the coming months.
While there are new challenges to overcome in the housing market, people shouldn’t consider arranging a mortgage to be an impossible task. However, it is vital people accept help and assistance from professionals in the field. If you are keen to arrange a mortgage, speak to a mortgage broker or experienced adviser and make sure you are fully equipped to make an informed decision.