Most UK Mortgage Approvals In 13 Years
Bank of England figures indicate that lenders in Britain approved more mortgages in October 2020 than they had in 13 years. This is further positive news that the UK mortgage and housing market is set to end on a high.
Mortgage approvals for property purchases reached 97,532, which was higher than the 92,091 which was reached in September. This figure was also higher than the predictions from most economists.
Another indicator that the housing market is busy right now comes in Google Trends figures. This date shows that visits to the leading property portals, Rightmove, Zoopla and OnTheMarket were 30% up on the year on year figures at the week ending 22nd of November.
Sam Tombs is a UK economist at Pantheon who said; “The housing market, however, remains set to weaken sharply after the threshold for stamp duty is returned to £125,000 from £500,000 at the end of March.”
But while the mortgage market remained resilient as all parts of the UK tightened social distancing rules in response to a second wave of infections, the Bank found that consumers remained cautious about borrowing using credit cards or other forms of lending.
Mortgage market faring better than the economy in general
It is fair to say the recovery in the housing market stands apart from how the economy is faring. There has also been an increase in unemployment numbers which are expected to increase in 2021.
The wariness that is felt by many people can be seen with the Bank of England data which indicates net consumer lending dropped by £590 million on the monthly figures. Most of this is down to people repaying credit card debt.
Lending also fell 5.6% compared to the 2019 figures. This drop was significant and represents the largest fall since monthly records started being collected in 1994.
There was also an increase in household savings, of £12.3 billion pounds. This was the largest increase since May of this year.
Alistair McQueen, the head of savings and retirement at insurer Aviva, said; “A reduction in the use of consumer credit and another increase in savings suggests many are bracing themselves for further economic uncertainty.”
Will there be less uncertainty in 2021?
While there are concerns as to what 2021 has in store, with COVID-19 and Brexit, positive news about the vaccine is likely to help people feel slightly more optimistic as to what is coming next.
No matter an individual’s personal thoughts regarding the vaccine, anything which removes much of the uncertainty which we are experiencing today has to be of benefit to the economy and country.
Thomas Pugh, a British economist at Capital Economics said; “The good news on vaccines means that businesses and consumers’ purses could be pretty full when regulations are loosened early next year, leading to a sharp rebound in consumption and growth.” While there are new challenges to overcome in the housing market, people shouldn’t consider arranging a mortgage to be an impossible task. However, it is vital people accept help and assistance from professionals in the field. If you are keen to arrange a mortgage, speak to a mortgage broker or experienced adviser and make sure you are fully equipped to make an informed decision.