"The latest rate of mortgage approvals is really quite astonishing given the dire position of the market just a few short months ago."
Mortgage approvals increased to 66,300, up from 39,900 in June. Approvals are now 10% below the February level of 73,700, but more than seven times higher than the trough of 9,300 in May.
Approvals for remortgaging with a different lender are little changed compared to June, at 36,000. They remain 30% lower than in February.
Net mortgage borrowing was £2.7 billion in July, higher than the £2.4 billion in June but below the average of £4.2 billion in the six months to February 2020. The increase on the month reflected a slight increase in gross borrowing to £17.4 billion in July, below the pre-Covid February level of £23.7 billion.
Hugh Wade-Jones, managing director of Enness Global Mortgages, commented: “The latest rate of mortgage approvals is really quite astonishing given the dire position of the market just a few short months ago. There is no doubt that the huge surge of buyer demand seen once the market reopened has been seriously turbo-charged due to the stamp duty holiday announced shortly after. With the combination of both causing buyers to return to the market at mass.
"As a result, we’ve seen the number of people approved for a mortgage rebound from the depths of pandemic paralysis in May to hit almost the same levels as this time last year in just two months, with the current trajectory sure to return the market to pre-lockdown levels in no time.
"The rate of this return to form really shouldn’t be underestimated and these notably heightened levels of buyer demand should prove just the medicine for the UK property market, reversing any pandemic decline in house price growth seen during lockdown.”
Richard Pike, sales and marketing director at Phoebus Software, added: “As July was the first month that the stamp duty holiday came into effect the impetus that we expect it to give to the market was not particularly evident in these figures from the Bank of England. However, all the evidence points to a continued recovery with many estate agents reporting a surge in properties coming to market.
“The number of properties coming to market reflects many different scenarios, are people selling because they can get a better price while the stamp duty holiday is in effect, or are some having to sell because of a change in their circumstances. The fact that people are continuing to pay down their debt shows a level of preparedness as we near the end of the furlough scheme and for many the prospect of redundancy. For now, the housing market is, in relation to many other sectors, in rude health, and likely to remain that way at least until next April.”
