Mortgage approvals spiked in September, moving from 85,500 in August to 91,500, says the Bank of England.
This is the highest number of approvals seen since September 2007 and, the bank adds, 24 per cent more than seen in February this year and 10 times higher than the 9,300 approvals witnessed in May.
In total, £17.7bn worth of approvals came through in August and £19.4bn in September.
Remortgage approval numbers, on the other hand, fell slightly, going from 33,300 at £6.3bn in value in August to 32,700 at £6.2bn in value in September – a 38 per cent drop on February’s approval numbers.
Meanwhile, and reflecting this uptick in approvals, households completed £4.8bn in net borrowing in September, significantly more than the £3bn borrowed against their homes in August, and up on the previous six-month average of £2.5bn, which has to take the startling April figure of £0.2bn into account.
North London estate agent Jeremy Leaf comments: “Those expecting a correction in house prices or activity will be disappointed by these figures, which are always a good indication of direction of travel.
“Unless buyers suddenly change course and cancel mortgage offers, most of these are likely to turn into transactions. Once again the market is proving its resilience despite growing uncertainties over additional restrictions and worsening economic news.”
Coreco managing director Andrew Montlake says: “As welcome as these mortgage figures are, it’s common knowledge that the post-lockdown bull run is already over.
“Lenders have been pulling down the shutters due to ongoing struggles with capacity and concerns over rising unemployment levels, specifically the impact on house price growth.
“What’s crucial is that the major lenders don’t go too far and start pulling products for more robust borrowers with larger deposits.
“As surreal as 2020 has been, the onus is on lenders to keep it real as we enter the winter months.
“There are still many landlords and owner-occupiers with equity and decent incomes, who are perfectly viable borrowers, and the banks shouldn’t forget this.”
And SPF Private Clients chief executive Mark Harris says: “Some lenders are struggling with service levels caused by this increase in demand but not all lenders.
“Price and criteria are key when choosing a mortgage, but you also need to consider how long it is going to take. There is no point in trying to get a mortgage from a lender who is six months behind if you need to exchange in four weeks.
“Underlying interest rates are going nowhere,” he continues. “They are almost zero and there is a flat line on the Swap rate curve. But there is a two-tier lending market – it is more challenging if you want to borrow more than 85 per cent LTV and rates have gone up slightly, while in the sub-75 per cent space it is very competitive as lenders look to add business to their balance sheets.
“We desperately need more support in the high-LTV space – it isn’t necessarily a risk issue with lenders, more a service issue, as they try to control volumes, and we hope this will improve in coming months.”
