2020 was a booming year for the property market with the stamp duty holiday and people relocating due to the lockdown. House prices were at a six-year high and mortgage approvals were also high. This was a surprising result considering the market was frozen for two months due to covid. According to the Money and Credit statistics from the Bank of England, 2020 had the highest ever recorded approvals since 2007.
It looks like this year could be one to follow, according to property eye, the average number of approved mortgages for new house purchases this February has increased since previous years. Over the past 10 years the average total number has been 63,500 but this February a total of 87,700 mortgage approvals were reported.
According to the data from the Bank of England, an additional £6.2 billion was borrowed during February, the highest borrowing since March 2016.
Demand from buyers continues to show with long-term averages of mortgage approvals up by 38%. The numbers decreased slightly in comparison to January’s reports, however, these figures were reported before the confirmation of the stamp duty holiday extension, buyers weren't guaranteed their potential thousands of pounds savings.
With the stamp duty holiday extension now staggered until September, and the introduction of the new 95% loan-to-value mortgage guarantee, we are expecting the market to continue to boom.
Until June the stamp duty will remain at 0% on properties up to £500,000, then from June buyers will be exempt from the tax for the first £250,000 of their purchase. From the start of October, the stamp duty tax will return to its previous normal level of £125,000. This is likely to mean mortgage approvals will continue to increase over the next coming months.
Published by Kye Liddle
Managing Director, Villager Homes Estate Agents