UK Mortgages Approvals At Lowest Since Mid-2020.

UK Mortgages Approvals At Lowest Since Mid-2020.

Mortgages approved in the UK have dropped considerably.

The number of mortgages approved for the purchase of houses in the United Kingdom fell to its lowest level in 16 months in October when the “distorting effect” of the suspension of the stamp duty ended.

Figures from the Bank of England showed 67,200 new homebuyer mortgages were approved during the month, up from 71,851 and well below the peak of 104,547 recorded in November 2020.

Bank data also showed a sharp drop in sums advanced to borrowers during the month, with net home loans of £ 1.6bn in October, down from £ 9.3bn in September.

However, the declines follow a frenzied few months in the UK property market where, according to company figures, more than £ 500bn was spent on housing in the year to September.

Stamp duty breaks across the UK led to a rush to buy, which, combined with shifting priorities for buyers as a result of the coronavirus pandemic, boosted sales and meant that larger homes got more popular.

“The October decline was driven by loans advanced to September to take advantage of the land tax relief from stamp duty before it was completely reduced,” the Bank said.

Relocation activity continued to increase in October as lenders competed for clients with ultra-cheap offers as speculation about an interest rate hike mounted.

A total of 41,642 relocations were approved during the month, compared to 32,745 in the same period last year.

Lucian Cook, head of residential research at real estate firm Savills, said: “It is not a big surprise to see a drop in the number of mortgage approvals in October, given the distorting effect of the end of the stamp tax holiday in September.”

Their research shows that in the year to the end of September, £ 513 billion was spent on the UK property market, the first time the figure has surpassed £ 500 billion and £ 170 billion more than pre-pandemic levels.

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