Yahoo Finance UK mortgage approvals hit 13-year high in November
UK lenders approved a record number of new mortgages in November, reaching all time highs since the start of the financial crisis in August 2007.
Bank of England data showed on Monday that UK mortgage approvals hit 104,969 in the month, up from 98,338 in October, beating expectations of a slowdown in the housing market boom amid the economic downturn.
The total for the first 11 months of 2020 now stands at around 715,000, just shy of the levels reached in 2018 and 2019.
The rise in demand was propelled by the stamp duty holiday, which expires at the end of March and is worth up to £15,000 ($20,000) to homebuyers.
Net consumer lending dropped by £1.5bn in November, roughly in line with forecasts, as spending opportunities were curbed due to the closure of non-essential retailers. This brought the total amount of debts repaid since the start of March at £17.3bn.
This was 6.7% lower than the same month the year prior, the biggest drop since monthly records began in 1994.
Households deposits also surged by almost £18bn in November, but there were significant withdrawals from National Savings and Investment accounts. Business deposit flows remained strong at £5.3bn and deposit interest rates remained at historically low levels.
READ MORE: Record decline in UK consumer borrowing but mortgage loans hit 13-year high
Islay Robinson, group chief executive of Enness Global Mortgages, said: “While many of us will have had a somewhat muted festive period, this certainly hasn’t been the case where the UK property market is concerned.”
“This leading indicator of buyer appetite has been on an upward trajectory since May and demonstrates the huge influx of market activity seen since the market reopened. So although 2020 ended with a whimper, the market shows no signs of slowing just yet and this huge degree of momentum is certain to carry through to this year.
“Of course, the fast approaching stamp duty deadline will dampen buyer demand to some extent. However, the availability of record low mortgage rates for those in a position to secure them should ensure demand remains robust beyond March which will bring long-term benefit to the market as a whole.”
Last week Nationwide (NBS.L) revealed that UK house prices rose to a six-year high, even as the rest of the economy took a hit from the coronavirus pandemic.
Data showed that annual house price growth accelerated further in December, reaching a six-year high of 7.3%, up from 6.5% in the previous month.
Prices rose by 0.8% month-on-month, after taking account of seasonal effects, following a 0.9% rise in November.
House prices ended the year 5.3% above the level prevailing in March, when the pandemic struck the UK. All regions in England saw prices rise over the year, within a range of 5% to 9%.
“The resilience seen in recent quarters seemed unlikely at the start of the pandemic. Indeed, housing market activity almost ground to a complete halt during the first lockdown as the wider economy shrank by an unprecedented 26%.But, since then, housing demand has been buoyed by a raft of policy measures and changing preferences in the wake of the pandemic,” Robert Gardner, Nationwide's chief economist, said at the time.
Watch: Why are house prices rising during a recession?
