Crisis? What crisis? Mortgage lending hits 13 year hi...

Mortgage approvals for house purchases have soared to a 13 year high according to Bank of England figures up to the end of August.

There was a rise from 66,300 in July to 84,700.

However, the year-to-date total is still suffering from the market closure during the spring lockdown: the BoE says there have been, in total, 418,000 approvals so far in 2020 compared to 524,000 in the same period in 2019.

In terms of remortgaging, there was no significant change from July but figures are 36 per cent lower than in February.

Jeremy Leaf, north London estate agent and a former chairman of the RICS residential faculty, says the August figures show the impact of the stamp duty holiday having “transformed the market which had been in the doldrums post-Covid”.

He says there are “a few signs of that upsurge running out of steam” following concerns over the spread of Coronavirus in recent weeks and the threat of further restrictions on the population.

Leaf warns that price rises will remain subdued as supply is now matching demand and buyers who are worried about the immediate future are wary of accepting over-ambitious prices.

Meanwhile another London agent - Marc von Grundherr, director of Benham and Reeves - says: “We’ve seen little to no let-up in the volume of homebuyers hitting the market despite a tightening of finance options available. Where they may have been traditionally buying with a 15 to 20 per cent deposit, they’re now stretching to as much as 30 per cent.

“They are doing so to not only to take advantage of the favourable rates currently on offer but to secure a stamp duty saving in the process. Since the stamp duty holiday was announced, the number of mortgage approvals seen on a monthly basis has more than doubled, and so the boost it has given the market cannot be underestimated.”

And Hina Bhudia, a partner at Knight Frank Finance, adds: "The pandemic has completely upended what is usually the one of the quietest months of the year for the property market. Interest rates remain ultra-low and the cheap cost of debt is driving a significant amount of this activity.

"Most of the activity we’re seeing is at sub 75 per cent loan to value and the lenders all want a bigger slice of that market. That means the choice of products for borrowers at that level is growing every day.

"The surge in transactions at that level also means turnaround times between submitting an application and getting approval varies hugely from lender to lender so borrowers should check carefully before proceeding.”