Mortgage approvals increased in August

Buyers are more optimistic about applying for mortgages

Mortgage approvals for home purchases rose to 84,700 in the generally quiet month of August, up from 66,300 in July, according to money and credit data from the Bank of England.

Net borrowing stood at £3.1bn in August, slightly higher than the £2.9bn recorded in July, but well below pre-COVID levels of £ 23.7bn in February.

“Buyers took advantage of the stamp duty holiday.”

Jonathan Harris, managing director of mortgage broker Forensic Property Finance, said: “It is no surprise to see a sharp increase in mortgage approvals for home purchases in August.”

“The market has been buzzing during what is usually a quiet holiday month, as buyers free from closing restrictions moved into the country and took advantage of the stamp holiday while they could.”

“Lenders have sometimes struggled to cope with the high volume of applications, and the service levels have not always been what we expected, so borrowers must allow more time to complete transactions.”

“Since the stamp duty holiday was announced, mortgage applications have doubled.”

Marc von Grundherr, COO of Benham and Reeves, said: “We have seen little to no decline in the volume of home buyers coming to market despite the tightening of available financing options.”

“Where they may have traditionally been buying with a 15% to 20% deposit, they are now spreading up to 30%. The buyers are doing this not only to take advantage of the favorable rates currently offered but also to ensure stamp duty savings in the process.”

“Since the stamp duty holiday was announced, the number of monthly mortgage approvals has more than doubled, so the boost it has given to the market cannot be underestimated.”

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