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Mortgage Approvals Have Risen to 13 Year High

MORTGAGES | 07.01.2021

The pandemic has undoubtedly caused many homeowners and first-time buyers to reassess their living situation and what they want from a future property purchase. This coupled with the government’s stamp duty holiday has led to a rise in mortgage approvals in the UK, with approvals reaching their highest levels in 13 years.

Borrowing has surged 

Figures released from the Bank of England (BoE) highlighted the amount of mortgages that had been approved in November. With the figures rising to 105,000, as more banks and building societies approved mortgages at the highest amount since August 2007.  The BoE has stated that the number of monthly approvals had increased by over 7,000 during October, which reflected a mortgage market boom when another national lockdown was declared in England.  During the first lockdown, the mortgage market plummeted as the economy took a huge hit. More recently though borrowing has increased rapidly, rising in November to £5.7bn. 

Mortgage approvals increased tenfold 

Mortgage approvals can provide borrowers with an early indicator of how much they can borrow over future months when they decide to take out a mortgage offer. Approvals dropped significantly in May of 2020, but have increased dramatically over the last few months.  The BoE also released figures from November last year that highlighted how households repaid £1.5bn of credit card debt, personal loans and car finance. This clearly reflected how many households were able to save more during the second national lockdown.  As much of the high-street was forced to close its doors, total household deposits actually increased by almost £5bn, reaching £17.6bn, as people saved more money. However, despite the surge in approvals, analysts have speculated that a sharp fall could soon impact the mortgage market. As the end of the stamp duty holiday in March looms, and unemployment rises, this could trigger a collapse in house prices as this new year continues. 

Are you looking for a mortgage deal?

Are you looking to take advantage of this surge in approvals and secure a great mortgage deal during this time? If so, we can help.  If you’re looking for a mortgage or a remortgage, you can contact our expert and highly-experienced independent mortgage brokers in Manchester. Our team can help you get the very best deal. The stamp duty holiday isn’t over yet, so this could be the perfect time for you to buy a property.
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