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Dip in December lending figures, but mortgage approvals are up

Christina Hoghton
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Christina Hoghton

The mortgage market has proved resilient throughout the pandemic, as the latest figures show

Mortgage borrowing decreased slightly to £3.6 billion in December, from £3.8 billion in November, according to figures from the Bank of England.

The figure is also significantly below the pre-pandemic average of £4.2 billion in the 12 months up to February 2020.

Approvals up

However, the number of approvals for house purchases, an indicator of future borrowing, increased slightly to 71,000 in December, above the 12-month average up to February 2020 of 66,700.

Approvals for remortgaging rose slightly to 44,900 in December, although they are still lower than before the pandemic.

Imran Hussain, director at Nottingham-based Harmony Financial Services, said his experience was of a red hot market: “Demand for mortgages has been as hot as ever in December and January and this looks to continue,” he said.

“With rates likely to rise throughout the year, people are looking to secure the best deals for their circumstances, especially with other costs also likely to rise such as utilities.”

Lewis Shaw, founder of Mansfield-based Shaw Financial Services, added: “There’s still a massive demand for mortgages, and there’s no sign of that stopping any time soon, which is excellent news for both current homeowners and prospective homeowners alike.

“While rising rates may dampen a few outliers who may not be sure about moving or buying, the majority will brush it aside as the cost of ownership is significantly cheaper than renting. We’re seeing increased demand from first-time buyers along with a significant uptick in people wanting to remortgage, both to get a better deal and more so to consolidate unsecured debt to reduce their overall monthly outgoings.”