Mortgage approvals return to pre-pandemic levels as lending 'falls sharply': BoE

Mortgage purchase approvals returned to pre-pandemic levels in October, falling to 67,200 from 71,900 in September, according to the latest Money and Credit statistics from the Bank of England.

Related topics:  Mortgages   |   Rozi Jones
|
29th November 2021
Bank of England BoE
"Now, the focus is shifting to remortgage activity as seen by the rise in remortgaging approvals throughout October."

The data shows that purchase approvals are now close to the 12-month average up to February 2020 of 66,700.

Approvals for remortgaging with a different lender rose slightly to 41,600 in October. This remains low compared to the 12-month average up to February 2020 of 49,100, but is the highest since March 2020 (42,700).

Net mortgage borrowing by individuals amounted to £1.6 billion in October, down from £9.3 billion in September. This is the lowest since July 2021 when individuals repaid £2.2 billion of mortgage debt.

October’s decrease was driven by borrowing brought forward to September to take advantage of the stamp duty holiday before it was completely tapered off. The net borrowing in October was £4.6 billion below the 12-month average to June 2021, when the full stamp duty holiday was in effect.

Gross lending fell sharply from £30.7 billion in September to £19.3 billion in October, while gross repayments fell to £18.2 billion from £20.6 billion in September.

Lisa Martin, development director at TMA, commented: “The fall in mortgage lending in October is not altogether unexpected. September saw the highest levels of lending since June as buyers rushed to complete their home purchases before the final stamp duty holiday deadline.

“Now, the focus is shifting to remortgage activity as seen by the rise in remortgaging approvals throughout October. With a record number of mortgages set to mature and a possible interest rate rise on the horizon, we will likely continue to see more borrowers take advantage of the low rates that are still on offer in the market at this time.”

David Whittaker, CEO of Keystone Property Finance, added: "With the SDLT spike now in the rear-view mirror, all eyes are now on the Bank of England. Inflation is still a large spectre haunting the central bank psyche and the uncertainty around new Omicron variant slowly making its way into Britain is likely to add to an already cloudy picture. Even more focus will now be on the next interest rate decision to provide some more clarity for lenders and homeowners when it comes to rates."

More like this
Subscribe
to our newsletter

Join a community of over 30,000 intermediaries and keep up-to-date with industry news and upcoming events via our newsletter.