Mortgage approvals surge to highest monthly total since September 2007
Lenders approved 91,500 mortgages for house purchase in September, the highest number since September 2007.
The Bank of England figures, published yesterday, provide a remarkable window into the size and scope of the surge in property market activity that has taken place since the UK’s lockdown in March.
This means approvals are now almost 25% higher than they were in February, before the effects of the pandemic were being felt in the UK property market, and about ten times higher than the 9,300 approvals in May, during the depths of the crisis.
The lending totals also make for interesting reading. Households borrowed an additional £4.8 billion secured against their homes in September, up from £3 billion in August. Borrowing dropped to a low of just £0.2 billion in April, and is now above the £4 billion average of the six months to February 2020, the Bank of England said.
What does this mean for borrowers?
Firstly, the surge continues to show little signs of slowing. We talked earlier this week about the impact of elevated levels of activity on borrowing costs.
There is a reluctance from the major banks to lend at the levels they have been previously lending at, both due to the mixed economic outlook and the sheer scale of new business coming through the doors as home seekers understandably try to complete purchases ahead of the end of the stamp duty holiday.
To keep the flow of business at manageable levels, the biggest lenders are resorting to increasing rates to ensure they aren’t the cheapest on the high street.
This means, if you have provisionally agreed a rate with a lender, you should lock it in as soon as possible.
Homeseekers should also start conversations with a mortgage broker about arranging a mortgage as soon as possible in the process of buying a new property. This is good advice in any market, but with lead times growing as all parts of the conveyancing process comes under strain, it’s more important than ever.
Finally, speak to us. We cover the entire market and have the relationships to provide a comprehensive view of what’s possible.