UK mortgage approvals reach 13-year high

Lenders approved 84,700 mortgages for UK home purchases in August, according to new data from the Bank of England.

Approvals climbed to the highest level since October 2007, just before the global financial crisis, and were well above the 66,200 average of the three years to 2019.

A combination of pent-up demand being released post-lockdown and the UK Government’s stamp duty holiday, which began in July, are thought to be behind the mini-boom in the housing market. Chancellor Rishi Sunak has increased the stamp duty threshold to £500,000 until the end of March 2021.

However, the total number of mortgage approvals for the year to date, at 418,000, is still 20% lower than the 524,000 recorded in the same period in 2019.

Net mortgage borrowing totalled £3.1bn in August, up from £2.9bn in July. Mortgage borrowing reached a low of £0.5bn in April, and is still below the average of £4.2bn in the six months to February 2020.

Meanwhile, net consumer credit borrowing remained positive in August at £0.3bn, following a £1.1bn increase in July. These increases followed net repayments of £3.9bn per month, on average, between March and June.