BoE: Mortgage approvals rise in August

Mortgage approvals for house purchase increased to 84,700 in the usually quiet month of August, up from 66,300 in July, the Bank of England’s Money and Credit data shows.

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

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

“The market has been buzzing during what is usually a quiet, holiday month, as buyers free from lockdown restrictions got on with moves to the country and took advantage of the stamp duty holiday while they can.

“Lenders have sometimes struggled to cope with the sheer volume of applications and service levels have not always been what we would expect so borrowers must leave longer for transactions to complete.”

Marc von Grundherr, director of Benham and Reeves, said: “We’ve seen little to no let-up in the volume of homebuyers hitting the market despite a tightening of finance options available.

“Where they may have been traditionally buying with a 15% to 20% deposit, they’re now stretching to as much as 30%. They are doing so to not only to take advantage of the favourable rates currently on offer but to secure a stamp duty saving in the process.

“Since the stamp duty holiday was announced, the number of mortgage approvals seen on a monthly basis has more than doubled, and so the boost it has given the market can not be underestimated.”