Information released by the Bank of England recently has shown that August saw 84,700 mortgage approvals. This is an increase of 18,400 from July and the highest level seen since October 2007.
Analysts are suggesting that this is in part due to the governments holiday on Stamp Duty for houses valued at less than £500,000 which was announced in July. It is also believed to be partially due to a backlog in demand from March when the housing market was forced to a standstill by the national lockdown.
A report from Savills has forecast that over a million homes will be sold this year, with house prices rising by 4% overall by the end of 2020 and then stabilising in 2021.
It hasn’t been good news for all house-hunters, however, with continued uncertainty surrounding furlough and the hospitality industry meaning that increasing numbers of lenders have removed their low-deposit mortgage options. This means that some first-time buyers and lower wage earners are effectively being frozen out of the housing market.
There has also been a marked reduction in the number of remortgages with different lenders, with figures remaining around a third lower than they were in February.
While the news of an increase in approvals appears to be a positive step in the right direction, the market remains unstable due to the uncertainty surrounding Brexit and Covid. Lenders are now hoping that things can remain stable enough to avoid a repeat of the housing crash in 2008.
