You are here: Home -

House purchase lending dropped sharply in quarter three

0
Written by:
07/12/2021
Despite the dip, transactions for the year are likely to be the highest seen since before the credit crunch
House purchase lending dropped sharply in quarter three

House purchase lending dropped sharply in Q3 but remained positive compared to last year, with activity strongest away from the south of England, according to UK Finance.

But despite the drop in transactions, over the year home sales will have reached at their highest level since before the Global Financial Crisis.

In its Household Finance Review for Q3, UK Finance noted that activity levels dropped ‘following the unprecedented peak in lending in June, as borrowers rushed to complete house purchases before the end of the second phase of the Stamp Duty Land Tax holiday’.

And it said that the continued strength in homemover activity as the exemption was phased out, suggests ‘there could be a more persistent attitudinal change to come out of the nation’s experience during the pandemic’.

Eric Leenders, managing director of personal finance at UK Finance, said: “Following the end of the furlough scheme and the stamp duty holiday, activity in 2022 will inevitably be weaker than this year but an improving labour market outlook gives cause for cautious optimism.

“However, there are downside risks, including from rising inflation, which have the potential to constrain activity.”

Nigel Purves, CEO of Wayhome, added: “Home movers disproportionately benefited from the Governement’s support through the pandemic, while would-be first time buyers were hung out to dry.

“The first rung of the property ladder is getting further and further away – salaries have fallen behind inflation, meaning even those in full-time work face needing to save for more than fifteen years for a deposit. Once they’ve got that deposit, restrictive lending criteria means getting a mortgage is still no mean feat.

“The current landscape is unsustainable; homeownership shouldn’t be an impossible dream – we need radical change in the property market to make it a reality for more people.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Your Mortgage Guides

Your Mortgage Award Winners 2021-2022

Read our guide to the best mortgage lenders in the UK

Read More >