The number of applications in August and September was 25% higher than the same period in 2019
As a result of the summer surge, 1.2 million mortgage applications are expected to be completed in 2020, equating to £216bn of lending, according to Experian.
However, this figure is still down on the 1.5 million loans, equating to £250bn of lending, seen in 2019.
Data collected by Experian shows that the total number of mortgage applications recorded July 2020 was up 13% on the previous year.
This trend continued into August and September, with the total number of applications 25% higher than the same period in 2019.
Experian attributes this to the government incentives, such as the stamp duty holiday.
Furthermore, Experian outlined that 1.9 million mortgage accounts are currently subject to an Emergency Payment Holiday (EPH).
The average balance remaining on these accounts is £150,000, which is 30% higher than the £114,000 owed by those who have not paused repayments.
According to Experian, the circumstances for those on payment holidays differ, with half seeing their disposable income decrease during the pandemic, while 25% recorded an increase in their disposable income.
The consumer credit reporting company noted that this suggests those on payment holidays are expecting to see their income change in the future.
Lisa Fretwell, managing director of data services at Experian, said: People moving home is good news for the economy, as activity in the property market fuels growth in related services.
Tax incentives and an extended period indoors have encouraged people to make a move this summer, as our analysis shows. Most moves require a mortgage and, while lenders want to extend new loans, they have a responsibility to ensure homebuyers are only taking on what they can afford in the long-term, Fretwell said.
Fretwell said, Covid-19 has complicated the financial situation for millions of people, and the challenge for lenders to understand each applicant’s circumstances has become more difficult as a result. Both traditional and new data sources will help lenders to make the highest quality decisions to keep Britain moving.
This article is for information purposes only.
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