99,000 mortgage approvals in January as market remains ‘relatively strong’ – BoE

There were 99,000 mortgage approvals in January, new Bank of England (BoE) figures have revealed, as the mortgage market remained “relatively strong” at the start of the year.

The total of mortgage approvals was a little lower than in December (102,800), but well above the monthly average in the six months to February 2020 (67,900).

The BoE also revealed that individuals borrowed an additional £5.2bn secured on their homes, compared to the monthly average of £4.0bn in the six months to February 2020.

Approvals for remortgage, which only capture remortgaging with a different lender, fell slightly in January to 32,400.

Commenting on the new statistics, Landbay CEO, John Goodall, said: “Although mortgage approvals are down slightly in January from December they are on par with the highs of 2008 just before the global financial crisis.

“Many people taking out a mortgage in January will be hoping they can beat the stamp duty holiday, which is more likely if the three-month extension goes ahead as been suggested in the press. Mortgage borrowing is also high for January, again buoyed by the stamp duty holiday.”

The BoE figures also showed that households’ consumer credit weakened in January, with net repayments of £2.4bn. This compares to an average net repayment of £1.0bn between September and December 2020, and was the largest net repayment since May 2020.

The Bank suggested the decline reflects less new borrowing, and revealed that as a result, the annual growth rate fell further to -8.9%, a new series low since it began in 1994.

Just Mortgages and Spicerhaart national operations director, John Phillips, added: “Brexit appears to have had a negligible impact on the mortgage market as approvals remained robust in January.

“Despite fears that we are heading towards a cliff edge due to the stamp duty holiday deadline, January showed there is still a huge appetite to move. With another lockdown imposed, savings for those lucky enough to still be in employment are rising, and faced with more time at home, there will be more and more people considering a move.

“With rumours of government backed 95% LTV mortgages, a potential three-month extension to the stamp duty holiday and the rollout of the vaccine, the mortgage market should continue to be the shining beacon of hope for the economy in 2021.”

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