According to the Bank of England (BoE) approvals soared by 330% from a record low of 9,300 in May to 40,000 in June. But this was still well below the 73,000 experienced in February, the Money and Credit report for June revealed.

The BoE also reported household net secured borrowing increased by £1.9 billion in June – higher than the £1.3 billion in May but, again, much lower than the £4.1 billion borrowed in the six months to February.

The BoE said the increase between May and June reflected more new borrowing and lower repayments.

But most of the industry focussed on the approvals, which provide a more immediate indicator of housing market activity.

The fact they had increased so strongly since May provided hope to many there were signs of recovery for the property market. However, with approvals 46% below February’s level, there is a feeling there is still some way to go when it comes to a complete revival.

Even in the remortgaging market, approvals were 30% lower than in the month before the Covid-19 lockdown began.

Mortgage approvals (source: Bank of England)

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Paul Stockwell, chief commercial officer Gatehouse Bank said: “Mortgage approvals have risen 330% in a single month, the clearest sign to date that the property market is picking up after months lying largely dormant.

“Mortgage approvals are a much quicker measure of housing market activity than transaction volumes, which are based on completed sales, so it’s not surprising to see them recover more quickly than sales volumes.

“June marked the first full month of property sales since lockdown and such steep growth shows buyers were eager to complete house property purchases after months of being locked out by lockdown.”

Jonathan Sealey, CEO of Hope Capital, said the figures provided ‘encouraging evidence’ the property market was rebounding slowly but surely from lockdown.

“That is in line with our experience at Hope Capital,” he said, “where we have seen a sharp increase in demand, with enquiries and applications both going through the roof over the last two months.

“It’s already clear that the ‘new normal’ will present opportunities, particularly in the residential market, to investors looking to meet people’s changing needs in the wake of Covid-19.”

Long-term measures

There was agreement the Stamp Duty holiday would provide a short-term boost but the government needed to look at longer-term measures to sustain the property market.

Tomer Aboody, director of property lender MT Finance, said: “Government action regarding stamp duty has prompted a positive reaction within the property market but there is still room for further changes in the autumn budget. This will help further boost the market and therefore the economy as a whole just as we come to the end of the furlough scheme.”