Important:

This article is for information purposes only.

Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.

UK mortgage lending hits 13-year high

UK mortgage

But overall mortgage lending was lower in 2020 compared with 2019 primarily due to the sharp drop in lending during the first lockdown

The number of mortgages approved by lenders in the last three months of last year reached the highest level for 13 years, the latest figures from UK Finance show.

Lending for residential property purchase was highest in December, up 31% compared with the same month in 2019.

But overall mortgage lending was lower in 2020 compared with 2019 primarily due to the sharp drop in lending during the first lockdown in the second quarter as pandemic restrictions took hold.

However, mortgage lending last year was still higher than expected due to strong activity in the fourth quarter.

Eric Leenders, managing director of personal finance at UK Finance, said: Homebuyers looking to take advantage of the stamp duty holiday were behind the housing market’s strongest quarter for purchases in 13 years, in the final quarter of 2020. Despite this uptick in activity, annual purchases for the whole year were around a tenth lower than the previous year, due to a complete shutdown of the market in the first lockdown.

The stamp duty holiday helped to boost activity at the end of 2020, and it is likely many of these purchases have been brought forward in order to take advantage of the savings. The chancellor’s announcement in the Budget to extend the stamp duty holiday until the end of June before then phasing it out will prevent a cliff edge, reducing the risk of house sales collapsing and will prove beneficial for all parties involved in the housing market, Leenders said.

The stamp duty holiday, which was due to expire in March, clearly sparked a flurry of homebuying activity, according to Richard Pike, sales and marketing director at Phoebus Software.

He commented: The stamp duty holiday obviously did as it was intended, stimulating the market in difficult circumstances. It has also created increased demand in a market where there isn’t enough property to meet that demand, which in turn is pushing prices up across the country.

Important:

This article is for information purposes only.

Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.