Mortgage approvals up by two thirds in one month since stamp duty holiday launched

The Stamp Duty holiday helped fuel a 66% monthly jump in mortgage approvals last month, Bank of England data suggests.

Monthly mortgage approvals data from the Bank of England shows lenders approved 66,300 mortgage applications for home purchase in July, up from 39,900 in June.

The figure is seven times higher than the trough of 9,300 reached in May but is still 10%below the pre-pandemic level of 73,700 in February.

Commenting on the figures, David Ross, managing director of Hometrack, said: “The growth in application volumes, fuelled by the Stamp Duty holiday and pent up demand following lockdown, continues to have a tangible impact with more successful applications.

“The good news for the Government is that the application volume we witnessed in July has translated to mortgage approvals over 20% up on the same time last year.

“Our data,which highlights application volumes, shows the growth in the market has kept pace in August, providing a real opportunity for sustained momentum.

“Faster time to sell data shows there remains an imbalance between supply and demand and it’s vital that this shortfall is remedied if the growth in the market is to continue.

“To maintain the recovery it’s crucial that lenders are able to process applications and enable home movers to complete transactions, stimulating confidence for increased supply.”

Sam Harhat,head of financial services at Andrews Property Group, was less positive.

Harhat said:“Mortgage approvals in July may have been up sharply on June but expect them to tail off again in August to reflect the significant tightening of lender criteria.

“Over the past month or so, it’s as if the property and mortgage markets have been operating in two entirely different realities.

“The demand for property is exceptionally strong, a result of pent-up demand, the low cost of borrowing and the Stamp Duty holiday, while the availability of mortgage finance has been contracting by the day.

“For 75% loan to value (LTV) mortgages and below, there is a huge amount of lender competition, but at higher LTVs finding a lender is like looking for a needle in a haystack.

“Where borrowers see opportunity, lenders see growing economic uncertainty, especially in the Autumn as the furlough scheme draws to a close.”

If you are looking for a new home in Stoke on Trent, then contact a member of the team at OneAgency and we can help guide you on your property journey

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