Mortgage loan sizes increase by £20,000 during pandemic

The average mortgage size increased by £20,000 between August 2019 and August 2021, according to new research from Trussle.

Related topics:  Mortgages   |   Rozi Jones
9th September 2021
House money pound price growth
"Homebuyers’ savings will likely begin to shift back towards pre-pandemic levels and mortgages will shrink accordingly."

Overall the average amount that homeowners looked to borrow increased from just above £170,000 in August 2019 to approximately £190,000 in August 2021.

Trussle’s data shows that when the stamp duty holiday was announced there was a huge uptick in the loan amounts homebuyers were seeking. In just two months between June 2020 (£179,755) and August 2020 (£200,104) the average amount borrowed soared by over £20,000.

Mortgage borrowing amounts continued to increase during 2020 and into the new year. In May this year, the average mortgage loan size for Trussle customers reached a 24 month high of £210,057.

However, with the end of the stamp duty holiday and life returning to some semblance of normal, things look set to be rebalancing. In June 2021, Trussle’s data shows that the average loan amounts began to roll back to approximately £190,000.

Miles Robinson, head of mortgages at Trussle, commented: “People have been incredibly sensible during the pandemic and as a result households' savings have grown considerably. This, coupled with incentives like the stamp duty holiday and lower interest rates, has meant that home buyers have had much more flexible budgets when it comes to finding their perfect home.

“However, we shouldn’t presume that buyer appetite for bigger mortgages is here to stay. As the UK continues on its path to reopening, spending on non-essential items will understandably begin to increase again, As such, homebuyers’ savings will likely begin to shift back towards pre-pandemic levels and mortgages will shrink accordingly.”

More like this
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.