Housing market returning to pre-pandemic normality
Mortgage approvals for residential property purchases remained broadly unchanged in November, when compared with a month earlier, as activity in the housing market returns to what has been described as ‘normal territory’ following last year’s housing market boom fuelled by the government’s stamp duty holiday.
According to the Bank of England’s (BoE) Money and Credit statistics, 66,964 mortgage approvals were issued in November, marginally lower than the 67,103 recorded in October. This was the lowest number of approvals since June’s 40,500 but close to the 12-month average in the year to February 2020.
Remortgage approvals reached 44,529, up from 41,978 a month earlier.
Jeremy Leaf, north London estate agent, said: “These figures show that the housing market is moving into more ‘normal territory’ as mortgage approvals return close to their pre-Covid averages.
Jeremy Leaf
“Certainly we are finding in our offices much the same pattern as buyers and sellers shrug off the loss of the stamp duty holiday and get down to business in the new year, especially as supply and demand are beginning to match up more closely.”
The data from the Bank of England also shows that net borrowing of mortgage debt increased to £3.7bn in November, from £1.1bn in October.
The net borrowing in November was however £2.9bn lower than the 12-month average to June 2021, when the full stamp duty holiday was still available. Gross lending increased to £22.1bn in November, from £19.5bn in October.
Joshua Elash, director of MT Finance, commented: “These are positive numbers for the property and mortgage sectors as we kick-off the new year, with the Bank of England reporting that mortgage debt for individuals increased to £3.7bn in November. This tells the story of a market finding its feet after the end of the stamp duty holiday in September which led to October’s significant drop.
“Approvals for house purchases are also now close to the 12-month average up to February 2020. Approval for remortgaging remains low although we expect this to bounce significantly in the coming months as consumer concern over a rising base rate will persuade more borrowers to tie themselves into a fixed rate on a longer-term basis.
“December’s data is likely to be stronger yet, although it will be interesting to see how the now seasonal concerns over another lockdown may have dampened the momentum of the bounce back.”
Source: https://propertyindustryeye.com/housing-market-returning-to-pre-pandemic-normality/