New mortgage approvals rose by 330 per cent between May and June, in a sign that the mortgage lending market is starting to recover from the impact of lockdown.
According to the latest money and credit statistical release from the Bank of England, 40,000 residential mortgages were approved in June – up from a record low of 9,300 in May.
However, this is still much lower than February’s pre-Covid level of 73,700.
“It will take time for the mortgage market to go back to pre-coronavirus levels, but we’re confident that lending volumes will begin returning to strength later in the year,” said Rob Barnard, director of intermediaries at Masthaven.
“Pent-up demand from buyers along with lenders’ appetite to lend and a continued easing of lockdown restrictions bode well for the market’s future.”
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A recent broker survey carried out by Masthaven found that 71 per cent of intermediaries were confident about the mortgage market’s longer-term prospects.
“As we start to emerge from the crisis and the UK returns to some form of normality, we’re committed to working closely with our broker partners to ensure borrowers have access to the finance they need,” added Barnard.
Paul Stockwell, chief commercial officer of Gatehouse Bank, said that the June figures represented the clearest sign to date that the property market is picking up after months lying largely dormant.
“Mortgage approvals are a much quicker measure of housing market activity than transaction volumes, which are based on completed sales, so it’s not surprising to see them recover more quickly than sales volumes,” said Stockwell.
“June marked the first full month of property sales since lockdown and such steep growth shows buyers were eager to complete house property purchases after months of being locked out by lockdown.
“The effects of the stamp duty tax break haven’t been felt yet so the expectation is that July will provide another very strong increase as buyers race to take advantage of the huge cash saving provided by the Chancellor.”
Property-backed peer-to-peer lenders have been been about their hopes for a property market resurgence, calling the government’s post-pandemic housing strategy a “game changer”.