UK Mortgage Approvals Hit 10-Year Record

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The number of potential home buyers across the UK approved for mortgages peaked more than 10 years in October, underscoring the continued and unforeseen strength of the country’s property market amid the coronavirus pandemic.

There were 97,500 mortgages issued last month, the highest since September 2007, according to data released Monday by the Bank of England.

The figure is also higher than the 92,100 mortgage approvals recorded in September; more than the 85,500 green lights in August; and 33% above the levels seen in February, before Covid-19 took hold and nationwide lockdowns were imposed.

“Mortgage approvals for home sales continued to increase in October, albeit at a slightly slower pace,” said Hina Bhudia, partner at Knight Frank Finance, in a statement to the report’s findings. “There was also a little trough activity in the last days of November, which is an early sign that we might see a traditional slowdown over the Christmas period after a manic summer surge.

This manic push has been attributed to a number of components, including buyers keen to modernize their homes to better suit their new lifestyles, which now often means more time at home and working remotely. .

Low borrowing rates and the temporary stamp duty holiday, which expires at the end of March 2021, further stimulate demand.The tax break, which eliminates the stamp duty on home purchases up to $ 500 £ 000 (US $ 667,450), can save up to almost £ 15,000 on a transaction.

According to Bhudia, the impending expiry of the economic stimulus measure means that any slowdown in the housing market is bound to be ephemeral.

“As time is running out until the end of the stamp duty holiday period in March, banks brace for a wave of new demands as buyers try to make deals in the system before the deadline.” , she said. “This risks stalling various parts of the home buying process as professionals including sellers, lawyers and lenders grapple with a cascade of new business.”

An extension or gradual end of the stamp duty holiday “would go a long way in ensuring that the real estate market continues to operate smoothly, supporting both jobs and investment,” she added.

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