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Mortgage approvals for house purchase hit 13-year high

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September was another strong month for the mortgage market, but how long can the mini-boom last?
Mortgage approvals for house purchase hit 13-year high

Mortgage borrowing rose by £4.8bn in September, according to the Bank of England, up from £3bn in August.

The number of mortgage approvals for house purchase increased to its highest level since September 2007, to 91,500, as the housing market mini-boom continued apace. This is 10 times the number of approvals recorded in May as the country came out of lockdown, said the Bank.

Tide turning

However, the strong September figures belie a slowdown that has already begun, according to Andrew Montlake, managing director at Coreco: “As welcome as these mortgage figures are, it’s common knowledge that the post-lockdown bull run is already over,” he said.

“Lenders have been pulling down the shutters due to ongoing struggles with capacity and concerns over rising unemployment levels, specifically the impact on house price growth.

“What’s crucial is that the major lenders don’t go too far and start pulling products for more robust borrowers with larger deposits. There are still many landlords and owner-occupiers with equity and decent incomes, who are perfectly viable borrowers, and the banks shouldn’t forget this.”

Average rates

Average new mortgage rates ticked up very slightly in October, said the Bank of England, by two basis points to an average 1.74%.

Rates on existing mortgages fell one basis point to 2.13% in September.

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