Mortgages Fuel 70% of Transactions Since Industry Lockdown Ended
12th April 2021
Research by the leading mortgage broker for global high-net-worth individuals, Enness Global Mortgages, has shown that mortgages fuelled 70% of property transactions across Great Britain following the reopening of the housing market in May 2020.
Enness analysed market data on the number of mortgage-financed sales as a percentage of all property transactions across each area of Britain between May 2020 and November 2020, the latest data available at the time.
Across Britain, 270,785 of the 387,667 homes sold during the period were purchased with mortgage finance, accounting for 70% of all transactions.
However, there were notable regional differences in the reliance on mortgage borrowing. London recorded the highest proportion of mortgage-financed purchases, with 80% of all property transactions backed by a mortgage.
The East of England and West Midlands also recorded levels above the national average, with 72% of transactions financed via a mortgage. The South East and East Midlands followed, with 71% of all property purchases mortgage-backed.
In contrast, the South West recorded the largest proportion of cash buyers, with just 64% of homebuyers using mortgage finance to complete their purchase.
At a local authority level, London dominated the rankings for mortgage-backed transactions. Lewisham was the mortgage hotspot of Great Britain, with 88% of all transactions financed via a mortgage. Barking and Dagenham and Waltham Forest followed closely, with 87% of purchases mortgage-backed.
Outside London, Slough and Crawley recorded some of the highest levels of mortgage-financed activity, alongside Hillingdon, where 86% of property purchases involved mortgage finance.
Sutton and Thurrock followed with 85%, while Greenwich and Merton completed the top 10 with 84% of transactions financed via a mortgage.
At the other end of the spectrum, East Lindsey recorded the lowest proportion of mortgage-financed purchases, with just 40% of transactions involving a mortgage. North Norfolk followed at 43%, while Argyll and Bute recorded 44%.
Torridge and Ceredigion both saw 45% of transactions financed via a mortgage, while Scarborough, Rother, South Hams and Pembrokeshire also ranked among the areas with the lowest levels of mortgage-backed property purchases.
The findings highlight the important role low borrowing costs played in supporting the property market following the reopening of the housing sector. While the stamp duty holiday provided an additional incentive for many buyers, the availability of low-cost mortgage finance remained a major driver of market activity across much of Great Britain.
At the same time, changes to lending criteria had the potential to make mortgage borrowing more difficult for some buyers, particularly those with less stable financial circumstances. However, with interest rates remaining historically low, mortgage finance continued to account for the majority of property transactions across Britain.
