The mortgage market has shown signs of recovery in July, but remains well bellow its pre-coronavirus levels, according to the Bank of England (BoE).
Money and credit statistics for July, out today (September 1), showed mortgage approvals had increased to 66,300 in the month, from 39,900 in June. However, this was 10 per cent below the pre-Covid level of 73,700 in February, prompting the bank to brand the market as "weak".
Approvals for remortgage, were “little changed” compared with June, at 36,000, although they remained 30 per cent lower than in February.
Meanwhile, net mortgage borrowing stood at £2.7bn in the month, up from £2.4bn in June. But that too was below the average of £4.2bn in the six months to February 2020.
The bank said: "The mortgage market showed more signs of recovery in July, but remained weak in comparison to pre-Covid.
"On net, households borrowed an additional £2.7bn secured on their homes. This was higher than the £2.4bn in June but below the average of £4.2bn in the six months to February 2020.
"The increase on the month reflected a slight increase in gross borrowing to £17.4bn in July, below the pre-Covid February level of £23.7bn and consistent with the recent weakness in mortgage approvals."
Despite this, Richard Pike, Phoebus Software sales and marketing director, thought the market had recovered well.
He said: “As July was the first month that the stamp duty holiday came into effect the impetus that we expect it to give to the market was not particularly evident in these figures from the Bank of England.
"However, all the evidence points to a continued recovery with many estate agents reporting a surge in properties coming to market.
“For now, the housing market is, in relation to many other sectors, in rude health, and likely to remain that way at least until next April.”
Similarly, Gareth Lewis, commercial director at MT Finance, believes data for August will show “even more of an uptick” in transactions when the stamp duty holiday, introduced in early July, begins to “filter through”.
But he added the data had been depressed by slow service speeds seen at some lenders.
Mr Lewis said: “While July’s numbers show an improvement on June, they would have been better still if transactions weren’t taking so long.
"Lenders still have staff furloughed or working from home, and it is taking them too long to process applications.
“This isn’t going to change for a while yet as they don’t have the capacity to bring everyone back to the office. With many surveyors only just coming back off furlough as well, this is having a negative impact on turnaround times.”
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