The housing market looks as though it’s bouncing back from the negative effects of lockdown. Latest figures show that mortgage approvals in June jumped to 40,000 compared to a mere 9,300 in May, and higher than the predicted figure of 33,900.
Although approvals by banks and building societies for new loans are still 46 per cent below February’s pre-lockdown figure, the fact that they’re increasing so quickly after restrictions eased and before the effects of the Stamp Duty holiday are felt, gives lots of hope for house sales, say experts.
Within days, estate agents were reporting a boost to the housing market, with an increase in valuation requests. And the July House price index from Nationwide reported more good news with UK house prices rising by 1.7 per cent in July, compared to a 1.6 per cent drop in June.
At the start of July, Chancellor Rishi Sunak temporarily increased the Stamp Duty threshold from £125,000 to £500,000, saving buyers around £4,500, until 31st March 2021. This applies to all homes in England and Northern Ireland, and means that anyone buying a house for less than half a million pounds pays no Stamp Duty.
According to Hugh Wade-Jones, managing director of Enness Global Mortgages: ‘These figures are yet more signs that the wider housing market has bounced back from pandemic paralysis with mortgage approvals now sitting at more than four times the levels seen since May.
‘This is largely due to the influx of buyer demand that hit the market following the easing of lockdown restrictions and demonstrates a market on its way back to good health.’
And Robert Gardner, Nationwide’s Chief Economist, says: ‘The rebound in activity reflects a number of factors. Pent up demand is coming through, where decisions taken to move before lockdown are progressing.
‘Behavioural shifts may be boosting activity, as people reassess their housing needs and preferences as a result of life in lockdown. Our own research, conducted in May, indicated that around 15 per cent of people surveyed were considering moving as a result of life in lockdown.’