SURGE IN HOME LOANS BOOSTS UK FIGHT BACK

Housing market ‘ in rude health’ as consumer confidence grows

A NEAR- doubling of the number of people buying homes is driving a mammoth economic bounceback, figures show.

New approved mortgages surged to 66,300 in July, up from 39,900 in June and May’s record low of 9,300.

Experts said the rise was “astonishing”, leaving the market “in rude health” while consumer

confidence is also springing back. Hugh Wade- Jones, boss of Enness Global Mortgages, called the soaring number of home loans “really quite astonishing given the dire position of the market just a few short months ago”.

He added: “We’ve seen the number of people approved for a mortgage rebound from the depths of pandemic paralysis to hit almost the same levels as this time last year in just two months.

“The current trajectory is sure to return the market to pre- lockdown levels in no time. The rate of this return to form really shouldn’t be underestimated.”

The Bank of England’s July figures show approvals were 10 per cent below February’s 73,700 – but August is set to beat July.

Meanwhile consumer borrowing has increased to £ 1.2billion – signalling a major pick- up in retail sales.

The demand for mortgages

‘ All the evidence is pointing to a continued recovery’

comes after Chancellor Rishi Sunak slashed the amount of Stamp Duty buyers must pay. Until April 1 next year, there is no duty on homes of £ 500,000 and under, benefiting around nine in ten buyers to the tune of up to £ 15,000.

Richard Pike, of mortgage software firm Phoebus Software, said: “All the evidence points to a continued recovery, with many estate agents reporting a surge in properties coming to market.

“The housing market is in rude health and likely to remain that way at least until April.”

Gareth Lewis, from property lender MT Finance, added: “There are positive signs indicating plenty of consumer confidence out there as people are borrowing money.

“There are more ‘ for sale’ and ‘ sold’ signs springing up, and even tales of gazumping. August’s numbers will show even more of an uptick once the stamp duty holiday starts to filter through to figures.

“July’s numbers would have been better still if transactions weren’t taking so long. Lenders still have staff furloughed or working from home.”

The Bank’s data also showed mortgage borrowing was up to £ 2.7billion in July, compared to £ 2.4billion in June.

This is still below the average of £ 4.2billion in the six months to February. Meanwhile an extra £ 1.2billion of unsecured credit was borrowed by consumers in July, ending four straight months of repayments – the longest stretch since the aftermath of the financial crisis.

The increase, to slightly above the average monthly amount of £ 1.1billion in the 18 months to February, coincides with a continued pick- up in retail sales.

Pablo Shah, senior economist at the Centre for Economic and Business Research, said: “The period of lockdown has built up a degree of demand for spending and therefore borrowing.”

BRITAIN’S booming housing market is a cause for hope that the economy can get back on track and a disastrous job- shredding downturn can be avoided. A surge in mortgage approvals shows that people across the country want to move on with their lives. If their confidence is mirrored across the wider economy then Britain can look forward to a post- pandemic return to prosperity.

Approvals have rocketed from 9,300 in May to 39,900 in June and to 66,300 in July. Families are investing in their futures and pursuing their dreams.

The figures show that Chancellor Rishi Sunak was right to raise the threshold at which the loathed stamp duty tax kicks in.

Britain’s economy went into deep freeze this year because the country had to go into lockdown to halt the spread of coronavirus – not because of underlying weaknesses.

The Government’s furlough scheme avoided catastrophic unemployment and with the right leadership it should be possible to keep investment confidence alive and revive growth.

The vitality in the housing market shows that people do not want to put their lives on hold any longer and are ambitious for the future. If the spirit of hope and aspiration that is alive in the country also fills the Treasury and Downing Street, we can accelerate towards a brighter horizon.