Mortgage lending has soared to record levels, according to latest data from the Bank of England1, which reveals that gross advances in Q1 totalled £83.3bn, which represents a 26.5% increase on the same quarter in 2020 and the highest level since Q4 2007.

Impact of the Stamp Duty holiday

In March alone, homeowners collectively borrowed £35.6bn, driven largely by people hoping to complete on property purchases before the original end of the Stamp Duty holiday on 31 March. The deadline was extended by the Chancellor to 30 June and will now be available at a reduced level of £250,000 until 1 October, when it reverts to £125,000. Despite the reduction in Stamp Duty savings, demand remains strong – Knight Frank’s figures for the first week of July2 show that the number of new prospective buyers was 31% above the five-year average for the same week.

Wider choice of mortgages

Data from Moneyfacts3 shows that there is now a greater choice of mortgages, with around 4,500 deals available. Competition from lenders is keen and has resulted in a fall in mortgage rates, with a couple of lenders currently offering two-year fixed rates of 0.94%. However, the lowest rates are only available to those with a sizeable deposit of around 40%. Eleanor Williams, Finance Expert at Moneyfacts, commented, “Over the past six months alone, availability has recovered by 1,619 – or 56% – and for the first time in over three years, we tracked improvements in choice across all the LTV (loan-to-value) brackets this month, great news for borrowers with all levels of equity or deposit.”

First time buyers on the front foot

The number of mortgages available for first-time buyers has soared recently, helped in large part by the government’s 95% mortgage guarantee scheme. Zoopla4 has reported that there are now over 200 mortgage products available for those with a 5% deposit, which is really good news for those hoping to get a foot on the property ladder.

A good time to remortgage?

Many lenders are offering eye-catching deals, some under 1%, to attract existing homeowners who are considering remortgaging. The price war between lenders has resulted in a rapidly changing market, with some products only available for a very limited time. As well as moving quickly, borrowers should consider the overall costs of the deal rather than the headline rate alone.  
Advice is crucial

With such a wide and ever-changing choice of mortgage products available, it pays to speak to us first. We can advise you on the most suitable deal for your circumstances and provide up-to-date guidance. Your home may be repossessed if you do not keep up repayments on your mortgage. You may have to pay and early repayment charge to your existing lender if you remortgage. 1Bank of England, 2021, 2Knight Frank, 2021, 3Moneyfacts, 2021, 4Zoopla, 2021

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(Your home may be repossessed if you do not keep up repayments on your mortgage)

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South Coast Mortgage Services Ltd is an Appointed Representative of Stonebridge Mortgage Solutions Ltd, which is authorised and regulated by the Financial Conduct Authority. Registered Office: 59 The Avenue, Southampton, Hampshire, SO17 1XS. Registered Company Number: 08414746 Registered in England & Wales.