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Mortgage approvals for purchases hit highest level since 2007

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  • 04/01/2021
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Mortgage approvals for purchases hit highest level since 2007
Mortgage approvals for purchase hit their highest level since 2007 in November last year, as buyers rushed to take advantage of the stamp duty holiday.

 

There were 105,000 agreements up from 98,300 in October, according to data from the Bank of England.

In total, £23.2bn of lending was completed in November, £1bn more than the same month the previous year and up £1.4bn from October.

However, despite the continued recovery from the lockdown earlier in the year, the £217bn completed in the year to the end of November was still £28bn less than the same point in 2019.

Approvals over the year to November were roughly in line with 2019 at 715,300 compared to 722,000.

Remortgages ticked up to 35,100 in November but are around a third lower than in February 2020, the data showed.

Interest rates on new mortgage edged up to 1.8 per cent, up from lows of 1.72 per cent in August but at roughly the same level as January 2020.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “The autumn was particularly active and strong for the mortgage market with just under a third of the year-to-date lending done in October and November, with £11bn of borrowing.

“Borrowers desiring a different property or location or motivated by the stamp duty incentive resulted in the highest levels of mortgage approvals for house purchase since 2007.

“Effective mortgage rates have risen slightly but remain historically low. These numbers show the dislocation between the cost of funds and interest rates passed onto borrowers as lenders manage volumes. We expect mortgage rates to remain competitive into the spring as borrowers attempt to take advantage of the stamp duty concession.”

David Ross, managing director of market intelligence company Hometrack, added: “Mortgage approvals in November were the highest since 2007 and the UK housing market has enjoyed its busiest Christmas in over ten years.

“While the economic impact of Covid has yet to be felt, news of the vaccine roll out, combined with the UK agreeing a deal on Brexit and the extension of furlough, should help maintain confidence in the market.

“Lenders are acting responsibly in the current buoyant market, closely monitoring the economy before making decisions in anticipation of changes in demand from home movers and the prudent supply of mortgages.”

 

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