Mortgage approvals made to home buyers at 13-year high

Bank figures show around 105,000 loans for house purcahse got go-ahead, writes Vicky Shaw of PA

The number of mortgage approvals made to home buyers was at a 13- year high in November, Bank of England figures show.

Around 105,000 home loans for house purchase got the goahead, up from 98,300 in October and marking the highest number since August 2007.

The surge in approvals meant that by November 2020, they had nearly caught up with levels recorded in 2019– despite the housing market effectively being shut earlier on in 2020 due to coronavirus measures.

There were 715,300 house purchase approvals up to November 2020, compared with 722,000 during the same period in 2019, the Bank said.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said home buyers have been motivated by a current stamp duty holiday, which ends on March 31, as well as the desire to moveto a different location.

He said: “We expect mortgage rates to remain competitive into the spring as borrowers attempt to take advantage of the stamp duty concession .”

Andrew Montlake, managing director at mortgage broker Coreco, said: “The closing stages of 2020 were among the busiest we’ve ever been as a broker.

“That looks set to continue in the first quarter, too, ahead of the looming stamp duty deadline.”

But he added: “Many prospective buyers with small deposits are now fully aware that their chances of getting a mortgage agreed are remote.”

Looking at non-mortgage borrowing, the Bank said consumer credit contracted by 6.7% annually in November – marking a new low since records started in 1994.

Consumer credit includes borrowing using credit cards, personal loans and over drafts.

Borrowing using credit cards fell by 14.5% annually – which was also a new low on the Bank’s records.

The Bank’s Money and Credit report said that since the start of March, households have repaid £17.3 billion-worth of consumer credit.

It added that the rate on inte rest-charging over drafts was 20.62% in November, above the rate of 10.32% in March 2020, before new rules ending overdraft fees, which borrowers previously paid on top of interestrates, came into effect.

Typical rates on new personal loans increased in November to 5.46%, but remain low compared with rates of around 7% in early 2020, the report said.

The typical credit card borrowing rate fell to 17.49% in Nov ember–anew low since similar records started.

Household deposits increased by £17.6 billion in November, but there were significant withdrawal s of £6.2 billion from NS&I (National Savings and Investments) accounts.