Mortgage approval rise as pandemic property boom continues

The pandemic property boom shows no sign of abating with net mortgage borrowing of £6.2 billion in February, the highest in nearly five years. However, fewer mortgages were approved during the month, according to the Bank of England, as many buyers realised they would not be able to meet the original stamp duty holiday deadline, due to end in March. Subsequently, some 135,035 mortgages were granted in February, compared with 143,148 in January.

Now that the stamp duty holiday has been extended, the property market is set to continue to be busy, as purchasers attempt to take advantage of the saving.

It also helps that mortgage rates remain low and with the government introducing a guarantee scheme on high loan-to-values, there will be more choice for first-time buyers, who are the lifeblood of the market.

Several lenders including Skipton, Yorkshire and Coventry building societies have announced their return to 95 per cent lending, as have TSB, Bank of Ireland and Aldermore. Other lenders are set to follow suit in coming weeks. With increased competition, this could result in falling rates, which would be further good news for borrowers.