As the full impact of the coronavirus pandemic began to be felt in the spring, activity in the mortgage market rapidly declined and predictions of economic disaster, rising unemployment and a deep property market slump were rife.
However, as lockdown restrictions eased and the UK adapted to a ‘new normal’, the outlook for the mortgage market was looking more positive. Data from mortgage technology provider Twenty7Tec shows that July was the busiest month of 2020 for mortgage searches, beating all pre-lockdown figures.
Stamp Duty holiday buoys housing market
Mortgage approvals soared to 84,700 in August, up from 66,300 in July and the highest level in 13 years, according to figures from the Bank of England.
Pent-up demand helped to drive the boom, but the nine-month Stamp Duty Land Tax (SDLT) cut also added to the momentum.
The tax break, which came into force on 8 July and runs until 31 March 2021, has raised the threshold at which Stamp Duty becomes payable on property purchases in England from £125,000 to £500,000.
Mortgage searches for properties within the £500k to £1m bracket have jumped significantly, having suddenly become more affordable to many buyers due to the thousands of pounds that can be saved on Stamp Duty.
House price growth exceeds expectations
On another positive note, house prices rose by 1.6% from August to September, the third consecutive month of substantial gains, according to data from Halifax. It also reported receiving more mortgage applications from both first-time buyers and home movers across the last three months than any time since 2008.
As well as being incentivised by the Stamp Duty holiday to move as soon as possible, increased home working is driving demand for more space and larger properties, particularly in rural areas. Confidence also appears to be returning for first-time buyers who were undoubtably the hardest hit by the coronavirus pandemic, after lenders withdrew hundreds of mortgages designed for buyers with low deposits.
However, Halifax also warned that the housing market is unlikely to remain immune to the economic impact of the pandemic. As the furlough scheme ends and unemployment figures are expected to rise, downward pressure on house prices is likely in the months ahead. Local lockdowns are also expected to slow activity in certain areas.
We can help with your mortgage search
If you’re planning to take advantage of the Stamp Duty holiday, don’t delay in getting your mortgage search underway. Finding a suitable mortgage can be challenging, particularly in the current climate, but we can help you.
We can assess a wide range of mortgage products and advise on which best suits your circumstances, so please get in touch.
Your home may be repossessed if you do not keep up repayments on your mortgage
Catch up on our other blog posts:
If you have a dog, you’ll know that they can be cute, loving… and a whole heap of trouble! Aviva1 recently backed this up when it revealed some of the company’s more noteworthy pet-related claims. From the pooch who turned on a tap and flooded his owners’...
By choosing to live just outside highly sought-after locations, analysis has shown that homebuyers could benefit from savings of up to 55%1, without forsaking their preferred location. Average savings come in at around 34% when locating five or ten minutes from a...
Are you worried about your finances? If so, you’re certainly not alone. According to a recent survey, 90% of households are worried about rising prices1. Financial worries can cause a great deal of stress and anxiety. In fact, nearly one in five people say they have...
Income protection insurance can be a cost-effective way of protecting yourself financially if you are unable to work due to illness or injury. What many people don’t realise is that taking out an income protection policy can have benefits beyond the financial....
Job interview, driving test, family life… the list of life’s stresses is, unfortunately, long and varied. New research has revealed, however, that buying a home comes out on top. Can’t Buy Me Stress 37% of recent UK homebuyers said that buying a house was one...
Nobody wants to think something bad happening to them. Perhaps it’s why so many people shy away from protection insurance – after all, it’s all too easy to think ‘it’ll never happen to me’. Unfortunately, ‘it’ can and does happen, whether ‘it’ be injury,...
Amid the backdrop of war in Ukraine and the spiralling cost of living, unpredictability is at the forefront of many people’s lives right now. The outlook for the housing and mortgage markets is no less uncertain. Taking a step back, however, it is possible to...
(Your home may be repossessed if you do not keep up repayments on your mortgage)
We charge a fee for arranging and advising you on the mortgage. The fee will be dependent on your circumstances but will not exceed £499. (Our typical fee is £299.)
For Lifetime Mortgages/Equity Release the fee will be £799.
Our mission is to provide honest mortgage advice, whilst helping you save money.
Get in contact
Or call —02380224925