Daily Mail

Mort­gage ap­provals nearly back to pre-virus num­bers

- By Miles Dil­worth Money Mail Re­porter Business · Mortgages · Finance · Real Estate · Bank of England · England · Sinclair Lewis

THE num­ber of mort­gage ap­provals last month was at its high­est since Fe­bru­ary in an ‘as­ton­ish­ing’ re­cov­ery for the mar­ket.

Suc­cess­ful ap­pli­ca­tions jumped from 40,000 in June to more than 66,000 in July. The fig­ure is now more than seven times higher than in May, Bank of Eng­land data shows.

Mort­gage ap­provals have grown from a low of 9,300 in May to 66,300 in July – just 10 per cent shy of pre-lock­down lev­els.

It means the mar­ket has al­most re­cov­ered to its pre-Covid state in two months.

Ex­perts said sales were likely to be ‘tur­bocharged’ by the Chan­cel­lor’s stamp duty hol­i­day, but warned the end of the fur­lough scheme could sti­fle de­mand.

The hous­ing mar­ket roared back to life after it was re­opened in May fol­low­ing a seven-week ban on home moves.

Hugh Wade- Jones, man­ag­ing di­rec­tor of En­ness Global Mort­gages, said the re­cov­ery was ‘as­ton­ish­ing given the dire po­si­tion of the mar­ket just a few short months ago’.

He added: ‘There is no doubt that the huge surge of buyer de­mand seen once the mar­ket re­opened has been se­ri­ously tur­bocharged due to the stamp duty hol­i­day an­nounced shortly after.

‘As a re­sult, we’ve seen the num­ber of peo­ple ap­proved for a mort­gage re­bound from the depths of pan­demic paral­y­sis in May to hit al­most the same lev­els as this time last year in just two months, with the cur­rent tra­jec­tory sure to re­turn the mar­ket to pre­lock­down lev­els in no time.’

Gareth Lewis, com­mer­cial di­rec­tor of prop­erty lender MT Fi­nance, said the fig­ures could be bet­ter still.

He added: ‘Lenders still have staff fur­loughed or work­ing from home, and it is tak­ing them too long to process ap­pli­ca­tions.

‘This isn’t go­ing to change for a while yet as they don’t have the ca­pac­ity to bring ev­ery­one back to the of­fice.’

Ex­perts have warned the re­cov­ery could be ham­pered as cau­tious lenders re­strict credit ahead of an an­tic­i­pated jump in un­em­ploy­ment.

Bor­row­ers with small de­posits have found it par­tic­u­larly dif­fi­cult to get loans as banks have been pulling deals and in­creas­ing rates across the board.

Sam Harhat, head of fi­nan­cial ser­vices at An­drews Prop­erty Group, said the prop­erty and mort­gage mar­kets ap­pear to be ‘op­er­at­ing in two en­tirely dif­fer­ent re­al­i­ties’.

He added: ‘The de­mand for prop­erty is ex­cep­tion­ally strong, a re­sult of pent-up de­mand, the low cost of bor­row­ing and the stamp duty hol­i­day, while the avail­abil­ity of mort­gage fi­nance has been con­tract­ing by the day.’

Last month, the Daily Mail re­ported that some buy­ers face los­ing their dream home be­cause lenders are in­creas­ing in­ter­est rates and ax­ing deals at the last minute as they strug­gle to cope with the tide of ap­pli­ca­tions.

Oth­ers are hav­ing to wait eight weeks for a mort­gage of­fer that would have taken two to three weeks in pre-Covid times.

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