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Mortgage Approval Highs And The Housing Market

When it comes to making an informed decision in the housing market, it is always worth paying attention to what the Bank of England announces. At Prestige & Village, we are pleased to say we have assisted many homeowners and buyers, and a big part of our work is ensuring people make sensible and justifiable decisions.

A quick way to get a view of the housing market is to see how mortgage approvals are performing. When there are many mortgage approvals, it is likely the market is in robust shape. This is positive news if you plan on selling your home, because you want to know there are many buyers looking for property.

Mortgage approvals hit a long-time high

Information provided by the Bank of England show £89bn of mortgage lending was approved between April and June 2021. This is the highest amount since 2007.

The majority of mortgage applications were made by people intending to live in the property, with at least 66.4% of applicants stating this.

Breaking this group down uncovers:

  • 24.7% as first-time buyers, which represents a 6.5% increase from a year ago and a 2.8% rise since the beginning of 2021
  • Home-movers rose to 41.7%, a rise of 18.3% on the previous year
  • Buy-to-let mortgages account for 11.3% of mortgage approvals, a fall of 3.1% from a year before

However, some names in the mortgage sector believe this positive activity might not last for too long.

We appreciate there are many ups and downs in the housing market, and we are here to assist you. While the end of the stamp duty holiday process will impact the market, you’ll find demand for rural living will always remain in place.

Mark Gilliver, business Development director at mortgage software provider the Target Group, said: “Throughout the pandemic, the mortgage market has been in a state of fluctuation, initially seeing a drop in demand during the first lockdown, but then experiencing a boom in demand thanks to the stamp duty holiday initiative.”

Mark also said; “This in itself has led to heightened demand and therefore an increase in prices, forcing many to take out larger mortgages. Whilst some were able to build deposit nest eggs thanks to reduced outgoings, quarter two saw a boom in demand, as homebuyers looked to escape a costly tax bill.”

Mark Gilliver concluded by saying; “However, the Q2 results could be seen as outliers, as we are unlikely to see such a rush again for a while. With inflationary pressures and the threat of increased interest rates not far off, the next quarter could well tell a very different story. This could be a sign that the phase of bigger mortgages is on its way out now that the UK has reopened and spending on non-essentials items is reintroduced into the public’s budgets.”

At Prestige & Village, we care about our community, and supporting others. We aim to provide you with as much help and assistance as we can. If you have any property or housing questions, please feel free to contact us today.

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