In early 2021, more mortgages agreed than any time since the financial crisis
In early 2021, there were more mortgages agreed than at the same point in the previous year and at any time since the financial crisis.
Main points to note:
- Mortgage commitments (agreed for the coming months) were £87.7 billion at the end of 2020. This was 24.2% more than a year earlier and the most since before the onset of the financial crisis.
- Advances (actually paid in Q4 2020) were up 4.2% in a year to £76.6 billion. However, in total for 2020 they had fallen 9.8% to £249 billion.
- The share of mortgages with a low loan-to-value was 4.5% down in a year and the lowest since this was first measured in 2007.
- The value of balances in arrears rose 3.4% in a quarter and is now 0.93% of all mortgage balances.
The Bank of England has released mortgage data for 2020 Q4:https://www.bankofengland.co.uk/statistics/mortgage-lenders-and-administrators/2020/2020-q4
Sarah Coles, personal finance analyst, Hargreaves Lansdown:
“The race for space has turned out to be more of a marathon than a sprint. We’ve been snapping up mortgages at the fastest rate since the onset of the financial crisis – and that was even before we knew the stamp duty holiday would be extended. However, not everyone is in this particular race, and some homeowners are completely exhausted.
“The mortgage market was booming at the end of last year, and the mortgages being agreed for the start of 2021 were at their highest for 14 years. This was even before the stamp duty holiday extension, which is likely to have brought more reluctant buyers back to the fray.
“But not everyone is enjoying this boom. If you need a mortgage with a high loan to value, deals are thinner on the ground than they have been at any time since 2007. In this context, you can understand why the government decided to step in and offer guarantees for high LTV mortgages.
“Meanwhile, arrears are starting to grow. Let’s not get ahead of ourselves, arrears are still incredibly low: right now they’re at 0.93% compared to 3.64% in early 2009. However, during the pandemic millions of borrowers have been able to rely on payment holidays, so have been able to avoid paying without running up arrears. Now that support is winding down, anyone who’s still struggling is running out of road. When the FCA asked people in October, 19.6 million expected to be struggling to pay the bills or service their debts by April. By the time we get the March figures, arrears could look much worse.”
Kindly shared by Hargreaves Lansdown
Main photo courtesy of Pixabay
