A multi-disciplined property group focussing on land and new homes, committed to managing the entire process for you.
The UK mortgage market boom of 2020 is no surprise. The Government’s stamp duty holiday, and house-hunters reassessing what they want from their home during the coronavirus pandemic, has seen UK mortgage approvals rise to their highest level in 13 years.
In November 2020, 10,5000 mortgages were approved by banks and building, equating the highest figure since August 2007 – albeit with the country in a second national lockdown. The UK mortgage market was at it’s highest for a number of reasons.
During the first lockdown in March – May 2020, mortgage borrowing plunged, as Britain’s economy sank into the deepest recession for 300 years. The national lockdown resulted in weaker consumer spending, households saving more, and repaying £17.3bn of credit card, personal loans and car finance off. The scenario changed by November 2020, with the demand for mortgages in the UK booming.
With property prices soaring to a 6 year high in 2020 as prospective buyers rushed to take advantage of the stamp duty holiday and re-evaluated their housing priorities during lockdown, some warn of a sharp drop-in activity is looming in 2021. Along with the stamp duty holiday ending and an estimated increase in unemployment, house prices in 2021 could collapse. The Office for Budget Responsibility predicts an 8% fall in house prices within the next year.
Analysts predict that house price growth will however return in 2022, with the pandemic reaching an endgame and consumer confidence increasing. Will the mortgage market continue to boom in the UK in 2021, we will just have to wait and find out.