Mortgage approvals soar to highest level since 2007 amid ultra-low borrowing costs

The post lockdown surge in property market activity accelerated in August as borrowers sought to capitalise on ultra-low borrowing costs.

Mortgage approvals for house purchase soared to 84,700 in August, from 66,300 in July, according to the Bank of England. That's the highest number of approvals since October 2007.

The pandemic has disrupted what would usually be one of the quieter months in the property market. Many purchasers emerged from lockdown seeking to revisit how and where they want to live, all while the Bank of England’s base rate remains at an all-time low of 0.1%.

Hina Bhudia, Partner at Knight Frank Finance, told the Guardian:

"The pandemic has completely upended what is usually one of the quietest months of the year for the property market.

"Interest rates remain ultra-low and the cheap cost of debt is driving a significant amount of this activity.

"Most of the activity we’re seeing is at sub 75% loan-to-value and the lenders all want a bigger slice of that market. That means the choice of products for borrowers at that level is growing every day.

"The surge in transactions at that level also means turnaround times between submitting an application and getting approval varies hugely from lender to lender so borrowers should check carefully before proceeding.”

If you'd like to find out more about the market's trajectory or discuss your own mortgage requirements, do get in touch.