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Bank of England mortgage approvals tick down in August

ended 29. September 2021

Data published by the Bank of England on Wednesday showed approvals for house purchases, an indicator of future borrowing, ticked down in August to 74,500 from 75,100 in July. 

This is the lowest since July 2020, but remains above pre-February 2020 levels. 

Approvals for remortgaging (which only capture remortgaging with a different lender) rose to 39,700 in August. This remains low compared to the months running up to February 2020, but is the highest since March 2020.

The data also showed individuals borrowed £5.3 billion of mortgage debt, on net, in August (Chart 1). This follows a rare net repayment of £1.8 billion in July.

Gross lending bounced back to £21.5 billion in August, from £16.6 billion in July. Gross repayments fell a little to £17.6 billion.

Reaction from the broker community:

 

10 responses from the Newspage community

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Dean Esnard
Director at Magni Finance
"August was definitely quieter than the months before, but that's expected during the summer holidays. September has picked up again although there is not as much intensity as buyers feel there is more room for negotiation now the market has cooled down. On the remortgage front, borrowers have been keen to switch products to take advantage of record low rates with some even paying a penalty to end their current deal early."
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Mark Robinson
Managing Director at Albion Forest Mortgages
"The mortgage market in August and September was as busy as ever and has only really been held back by the lack of properties available for sale. It's been positively frantic out there. Heading into the final quarter is usually quieter, as people prefer not to move home in t tohe approach Christmas, but we're seeing no signs of activity slowing down at all yet."
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Imran Hussain
Director at Harmony Financial Services
"August was as hectic as ever, driven primarily by first-time buyers. Demand still continues to outstrip supply, with multiple buyers for each property on the market. It's likely to remain busy for the rest of the year as people seek to move into their new homes before Christmas or for a fresh start early in 2022."
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Lewis Shaw
Owner and Mortgage Expert at Shaw Financial Services
"August was as busy as the months before it. September has also been full steam ahead with another record breaking month for mortgages agreed. We now face the final quarter which we’re also expecting to be busy, although things will invariably slow up as we enter the final countdown into Christmas."
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Mark Dyason
Owner at Edinburgh Mortgage Advice
"All-time low mortgage rates, the post-Covid 'find me a house with garden' demand and the stamp duty cut off approaching mean demand has still been strong from buyers. The lack of stock in the market could have dampened these numbers but overall we see a market that is still very much growing. Remortgages will power the market during the winter as rates fall further and everyone looks for savings to offset rising living costs."
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Scott Taylor-Barr
Financial Adviser at Barnsdale Financial Management
"August and September were certainly quieter on the applications front, but it feels busy as I'm fighting cases through with some lenders, who are more cautious than ever, especially with the self-employed. I have certainly seen a rise in the number and value of down-valuations recently, with more surveyors disagreeing with the prices people seem to be offering for property. As the end of the year approaches, the market could go two ways: we could see a rush as people try to end the year on a high and move to their new home or an early Christmas slow-down as attention shifts to parties and presents."
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Jamie Thompson
Mortgage Broker at Jamie Thompson Mortgages
"September has been the best month on record for me, no matter which way you measure it. First-time buyers are out in force to get on the property ladder, armed with agreements in principle showing they can borrow five and a half times their income in some cases. Lenders' service levels are mostly back to what they should be and rates are at historic lows as banks clamber over each other to attract good borrowers. Many homeowners are taking advantage of this cheap money to do up their existing place over selling and moving on up the ladder. As long as lenders and borrows keep exuding this level of confidence the sector will continue to thrive."
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Aaron Strutt
Product and Communications Director at Trinity Financial
"We're finding lots of buyers are getting their mortgages agreed in principle so that they can go property hunting with confidence. They want to take advantage of the cheap mortgages while they can because they know they will not be around forever. Lenders are still improving acceptance criteria to create demand with more income stretch mortgages and cheaper first-time buyer deals available."
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Rhys Schofield
Brand Director at Peak Mortgages and Protection
"August was a bit quieter but then again it always is as any estate agent will tell you. This is a sign of a normal market returning, which is something we didn't see last year. September, though, was back with a bang and we'll likely find ourselves rushed off our feet until Christmas. The bottleneck is the number of houses coming onto the market. Demand still massively outstrips supply, so prices, for now at least, can only go one way."
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Paul Neal
Mortgages & Equity Release Advisor at First Choice Financial Services
"Activity in the mortgage market was steady throughout the summer. Even with the Stamp Duty discount coming to an end, there is still a lot of competition for the low level of properties that are available. We are seeing people now preparing for the mortgage process by getting a Mortgage in Principle to try and get themselves to the top of the list when it comes to making an offer. The property market is likely to get quieter in the run-up to Christmas as people panic-buy presents rather than petrol."