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Mortgage approvals return to normal levels: here’s what you need to know
The Bank of England yesterday said mortgage approvals for house purchase hit 66,300 in July. That’s up 66% on June’s figure and is within 10% of February’s peak.
Activity among house purchasers is now largely in line with the five-year average, and we expect the Bank of England’s data to show further strengthening in the coming months.
Remortgaging remains subdued and was little changed from June to July at 36,000 – or about 10% lower than the February peak.
The average cost of fixed rate mortgages is now climbing at certain loan-to-value ratios (LTVs). Average two year fixed rates at 90% LTV have moved to 2.66% in July from 1.97% in February, while those at 85% LTV have moved to 2.01% from 1.69% during the same period.
Simon Gammon, Managing Partner, Knight Frank Finance, said: "It’s clear from the strength of the recovery that the cut to stamp duty is working as intended and we can expect a sustained period of robust and competitive sales activity.
“Our data suggests activity has been particularly strong for homes valued in the region of £750,000 and £1 million. We’re also seeing a notable recovery in the number of first time buyers as the reduced stamp duty at least partially offsets requirements for larger deposits.
“The future trajectory of the recovery will depend on how many people lose jobs at the end of the furlough scheme. Beyond that, the reduced stamp duty rates are due to end in March, and we’re likely to see a bottleneck of transactions build up in the run up unless the government opts for an extension.”
If you'd like to find out more about the market's trajectory or discuss your own mortgage requirements, do get in touch.