ResidentialOct 29 2020

Mortgage approvals reach 13-year high

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Mortgage approvals reach 13-year high
Credit: Luke MacGregor/Bloomberg

Mortgage approvals for house purchase have reached their highest level since September 2007, according to latest data from the Bank of England.

The central bank’s money and credit statistics for September 2020 showed the number of mortgage approvals for house purchases continued its sharp increase to 91,500, from 85,500 in August.

According to the bank, approvals in September were up 24 per cent on February, before the coronavirus pandemic shut the housing market.

It added that approvals in September were around 10 times higher than the “trough” of 9,300 approvals in May.

Net mortgage borrowing was also up in the month, from £3bn in August to £4.8bn in September.

Mark Harris, chief executive of SPF Private Clients, said: “These strong Bank of England numbers come as no surprise as September was our best month for originations this year as a mortgage broker.

“The stamp duty holiday has clearly stimulated the market, combined with the impact of Covid and the desire for people to move somewhere with more outside space.”

Likewise Andrew Montlake, managing director at Coreco, attributed the level of mortgage approvals in September to the stamp duty holiday surge, as well as pent-up demand after lockdown.

But Mr Montlake warned: “As welcome as these mortgage figures are, it’s common knowledge that the post-lockdown bull run is already over.

“Lenders have been pulling down the shutters due to ongoing struggles with capacity and concerns over rising unemployment levels, specifically the impact on house price growth.

“What’s crucial is that the major lenders don’t go too far and start pulling products for more robust borrowers with larger deposits.”

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