At Roots Mortgages, we believe in starting things off on the right foot. Whether its an initial meeting with a potential client or the first round of coffees for the day in the office, we feel it’s important to start as you mean to go on.
A similar thing has happened with mortgage news for the year 2021, with the first set of headlines particularly positive for buyers and the wider industry.
This is because mortgage approval rates reached their highest point in 13 years in November 2020. In what was a tricky year for the industry generally, this shows that among those of us who committed to purchasing a home, a high rate managed to achieve their goal despite some serious adversity.
What exactly do the figures show?
These figures come from the very trustworthy source of the Bank of England, and show that in November 2020, mortgage approvals for house purchase increased to 105,000. This is the highest level since August 2007, back when Gordon Brown was Prime Minister (remember him?).
Other findings from the Bank of England show that net mortgage borrowing strengthened to £5.7 billion in November 2020. This is the highest since March 2016, and a fair bit higher than the average in the six months to February 2020, which stood at £3.9 billion.
Additionally, effective interest rates on new mortgage borrowing increased to 1.83%. There were also 715,300 house purchase approvals up to November 2020, which is not far off the number seen for the same period last year.
There was also a slight increase in the number of approvals for remortgage in November 2020, rising to 35,100. This figure is still a fair bit down on those seen in the early part of 2020 however.
Is this purple patch likely to continue?
We’d be foolish to look too far into the crystal ball at present, but these figures should be cause for optimism.
On one level, it shows that there are plenty of lenders willing to provide mortgages to potential buyers and help to push through mortgage deals. This should be welcomed by anybody considering purchasing a new home this coming year.
It also shows that the mortgage industry is pretty robust. Granted, the stamp duty holiday will have helped these stats. But it also shows that even in tough times, the processes and practices in place are enabling the industry to operate in a way that should sustain it for the foreseeable future.
Though we would like to think that things will soon be back to normal, the new lockdown only means that things will likely remain tricky and difficult for a fair while to come. This will undoubtedly remain the case for contractors and freelancers as it will be for practically everybody facing restrictions.
What is clear though, not too far out from the first anniversary of Coronavirus first hit British shores, is that the mortgage industry has found a way to deal with and operate within the confines of the ‘new normal’.