The total value of new mortgages due in the coming months reached its highest level since 2007 towards the end of last year, according to figures from the Bank of England.
New mortgage commitments in the fourth quarter of 2020 totaled £ 87.7 billion, the highest figure since the third quarter of 2007, according to statistics from mortgage lenders and administrators.
But the proportion of ultra-low deposit mortgages issued in the fourth quarter of 2020 has fallen to its lowest since the record began.
We took out mortgages at the fastest pace since the onset of the financial crisisSarah Coles, Hargreaves Lansdown
The Bank said the share of mortgages granted to borrowers with deposits below 10% was 1.2%, marking “the lowest level since the start of these statistics in 2007”.
Sarah Coles, personal finance analyst at Hargreaves Lansdown, said: “We took out mortgages at the fastest rate since the onset of the financial crisis – and that was before we even knew the stamp duty break. would be extended …
“But not everyone is benefiting from this boom. If you need a mortgage with a high loan-to-value ratio, transactions are slimmer in the field than they’ve ever been since 2007. ”
Some 40% of mortgages issued in the fourth quarter were for people with deposits of less than 25%. This figure remained broadly unchanged from the previous year, the Bank said.
Gross loans totaled £ 249bn in 2020, down 9.8% from 2019 (£ 276bn).
The government recently unveiled a new 5% deposit mortgage guarantee scheme to help reinvigorate low deposits in the market.
Bank of England figures show how strong the real estate market’s rally is as year-end approachesMark Harris, SPF Private Customers
He also extended the stamp duty holiday, which was due to end on March 31. Stamp duty thresholds will not fully return to normal levels until October.
Mark Harris, Managing Director of mortgage broker SPF Private Clients, said: “The figures from the Bank of England show how strong the housing market is rising as we head towards the end of the year.
“The foreclosure experience and the subsequent desire for more space, combined with the stamp duty holiday and record interest rates, persuaded many people to take the plunge and move out.
“High loan-to-value mortgages were more difficult to obtain because lenders reduced their rates by 90% (loan-to-value loans) and more. The government’s decision to introduce a mortgage guarantee to encourage lenders to re-offer 95% mortgages will make a difference for first-time buyers and others who simply cannot meet a large down payment.
Jeremy Leaf, North London real estate agent and former residential chairman of the Royal Institution of Chartered Surveyors (Rics), said: recent extension.
Paul Stockwell, Commercial Director of Gatehouse Bank, said: “The stamp duty extension announced in the budget last week will help ensure that many of these mortgage deals go through and that gross mortgage advances in the first three months of 2021 are likely to be strong. “