When you consider the ups and downs of the property and mortgage markets in 2020, the number of approvals for the mortgage sector are astounding.
According to a study published by Trussle, it appears as though mortgage approvals were at a record high. In the second half of the year, there was an increase of 154%.
The stamp duty holiday drove demand for homes and mortgages
This is down to the stamp duty holiday, which played a massive role in driving demand for homes and mortgages. There is also the fact that in then first half of the year, the market closed down for some time.
Not only that, many lenders significantly reduced the number of mortgages they offered to clients.
With many people claiming a mortgage holiday, the industry had to pivot virtually overnight to meet this demand. Add in the industry coping with reduced staff numbers, and remote working, and the figures for 2020 are remarkable for the mortgage sector in the UK.
While the stamp duty holiday is scheduled to close at the end of March 2021, it looks as though demand for homes and mortgages has continued into this year. As such, it currently takes an average of 134 days to complete a home purchase in the UK.
Some areas experienced more growth than others
As is often the case with the property and mortgage market in the UK, there was a different level of growth across many parts of the country. Some parts saw a significant increase in the number of mortgage applications and approvals.
The regions which experienced the largest increase in mortgage approvals for 2020 are as follows:
- The West Midlands, who experienced an increase of 244%
- The South West, who experienced an uptake of 236%
- The East Midlands, where there was an increase of 214%
- The South East, with an increase of 204%
- The North East, where there was a rise of 191%
Miles Robinson, the head of mortgages at Trussle, said; “Appetite for property remained incredibly strong despite the unprecedented challenges presented by the pandemic, which placed many households under a huge amount of financial strain. Lenders had to make big changes to their internal processes to accommodate a working from home set up. Despite experiencing some delays in the market, mortgage approvals rose to the highest level in 13 years during November last year.”
Miles also said; “Buyers opting to purchase homes in regional locations, which are typically more rural, was no doubt the property trend of 2020 — but only time will tell if this is a long-term trend. If 2021 sees us able to return to some form of normality, old priorities of location over space and access to workplaces and amenities might mean people start flooding back into cities.”
There is no doubt 2021 will be a challenging year in the housing market, but there is a lot to feel optimistic over.
Anyone looking to arrange informed and up to date guidance regarding a mortgage should speak with an experienced professional.