Data released from the Bank of England showed that mortgage approvals doubled in July compared to June! And so as the weather cools, the mortgage market heats up!
66,300 loans were approved which is only just down from the 73,700 we saw in February, Net borrowing increased by £2.7B in July (total gross borrowing was £17.4B), again up on the £2.4B we saw in June.
House sales at 13 year high
Unsurprisingly, that came hot off the heels of data released from the NAEA which showed house sales hit a 13 year high. Sales agreed per office was 13 in July. The last time we saw figures that high was in June 2007. There is no doubt that this is fuelled by the stamp duty holiday which runs to the end of March 2021 which is starting to make up for at least 3 years of very sluggish activity.
House price data mixed
The impact this has all had on house prices is unclear at present with some mixed data still coming out.
Halifax did report that prices were up in June by 1.6%, pushing house prices to their highest ever level, but that was off the back of 4 months of declines, so that should really be viewed as prices flattening off (rather than falling as they had been).
The mortgage market heats up
That said, the most basic market dynamic of all is supply and demand, and if sales keep getting agreed at the above rate, supply will be diminished and push prices up unless more property comes to the market. So while the summer may be over, the property market looks like it is finally hotting up for the first time in many years!
Money Markets pretty much all up at the end of August, only Libor continuing to edge ever so slightly down. Interesting that 5 year money is starting to noticeably creep up which starts to paint a brighter picture for the UK economy than had been the expectation back in June & July.
Still not worth the premium in fixing on a longer term product in our humble opinion as there are so many short term hurdles to overcome in Covid & Brexit (hence the lower Libor and 2 year figures) but interesting to see a more positive outlook than had been the case just a few months back.
In the last week:
3 Month Sterling Libor = down by 0.004% at 0.064%
2 Year SWAP = UP by 0.021% to 0.116%
5 Year SWAP = UP by 0.059% to 0.247%
2 Year Variable from 1.19%
2 Year Fixed Rates from 1.07%
5 Year Fixed Rates from 1.31%
BTL Rates from 1.14%
The actual rate you will be offered will be dependent on your personal circumstance and deposit level. Please speak to one of our advisers so that they can guide you through this process
Source: Twenty7Tec August 2020
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