Sharp recovery of mortgage approvals

by Property118.com News Team

11:14 AM, 30th October 2020
About 4 weeks ago

Sharp recovery of mortgage approvals

Make Text Bigger
Sharp recovery of mortgage approvals

The latest Bank of England statistics for money and credit in September indicate the mortgage market strengthened further from its recover post lockdown. Net an additional £4.8 billion was borrowed secured on homes, following on from net borrowing of £3.0 billion in August. This reflects increased levels of mortgage approvals for house purchases over the last few months.

Mortgage borrowing bottomed out at net £0.2 billion in April but has since recovered reaching levels slightly higher than the average of £4.0 billion in the six months to February 2020. The total gross borrowing for September was £20.5 billion, but still below the February level of £23.4 billion.

 

The number of mortgage approvals for house purchases in September rose sharply to 91,500 from 85,500 in August. This was the highest number of mortgage approvals since September 2007, and is 24% higher than approvals in February 2020.

Approvals in September were close to 10 times higher than May with only 9,300.

Remortgage approvals for remortgage fell slightly at 32,700, and remain 38% lower than in February 2020.

The effective interest rates reflecting actual interest rates paid by borrowers on newly completed, and the outstanding stock of, mortgages remained pretty static in September with new mortgage rates increasing 0.02% on the month to 1.74%, while the interest rates on the stock of mortgage loans fell 0.01% to 2.13% in September.


Share this article

Twitter Facebook LinkedIn

Comments

Neil Patterson

11:31 AM, 30th October 2020
About 4 weeks ago

Craig McKinlay, New Business Director at Kensington Mortgages, commented:

“The temporary reform of stamp duty and pent up demand has provided a boost for the property market. Despite there being less product choice available, September is traditionally a busy month of activity for the market, and mortgage approvals have shot up to their highest rate since September 2007. However, we believe these results aren’t showing the many first-time buyers and self-employed borrowers who are being left behind in this mini-market boom - unable to take advantage of the stamp duty holiday. Mortgage lenders need to be as flexible as possible to accommodate these individuals and use manual underwriting approaches to assess an individual’s affordability on a case by case basis.”

TrevL

20:39 PM, 30th October 2020
About 3 weeks ago

This is a dead cat bounce in approvals and sales prices, aided by the SD change.....I'm pretty sure the smart money is selling into it, but it will probably be killed by reduction of furlough schemes and the potential second lockdown we are probably gonna get, the virus is already out of control.


Leave Comments

Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.

Forgotten your password?

OR

BECOME A MEMBER

Non-resident Landlord scheme and 6 months rule?

The Landlords Union

Become a Member, it's FREE

Our mission is to facilitate the sharing of best practice amongst UK landlords, tenants and letting agents

Learn More