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Mortgage approvals remain robust in December

ended 01. February 2022

Net borrowing of mortgage debt by individuals decreased slightly to £3.6 billion in December, from £3.8 billion in November. This is below the pre-pandemic average of £4.2 billion in the 12 months up to February 2020. Gross lending fell to £21.7 billion in December, from £22.4 billion in November. Gross repayments fell to £18.1 billion from £19.4 billion in November.

Approvals for house purchases, an indicator of future borrowing, increased slightly to 71,000 in December, above the 12-month average up to February 2020 of 66,700. Approvals for remortgaging (which only capture remortgaging with a different lender) rose slightly to 44,900 in December. This remains low compared to the 12-month average up to February 2020 of 49,500, but is the highest since February 2020 (52,500).

The views of brokers can be found below.

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11 responses from the Newspage community

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Scott Taylor-Barr
Principal Adviser at Barnsdale Financial Management
"There is an air of caution in the conversations that I've been having with people so far in 2022. All the drivers of our crazy property market are still there, namely a criminal undersupply of housing stock and stupidly cheap interest rates, even if they are a notch higher than a few months back. These are being tempered, however, by the barrage of confidence-killing news stories surrounding interest rate rises, inflation, energy prices, tax hikes, Russian invasions. None of it really shouts "buy now". People will and do still buy houses, but the rampaging whirlwind that was the property market of 2020 and 2021 feels like it's given way to something a little more reserved. And now I've said that it will probably be another bonkers year for house price growth."
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Lewis Shaw
Owner and Mortgage Expert at Shaw Financial Services
"There's still a massive demand for mortgages, and there's no sign of that stopping any time soon, which is excellent news for both current homeowners and prospective homeowners alike. While rising rates may dampen a few outliers who may not be sure about moving or buying, the majority will brush it aside as the cost of ownership is significantly cheaper than renting. We're seeing increased demand from first-time buyers along with a significant uptick in people wanting to remortgage, both to get a better deal and more so to consolidate unsecured debt to reduce their overall monthly outgoings."
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Imran Hussain
Director at Harmony Financial Services
"Demand for mortgages has been as hot as ever in December and January and this looks to continue. With rates likely to rise throughout the year, people are looking to secure the best deals for their circumstances, especially with other costs also likely to rise such as utilities. Rising rates and inflation may deter those who are not actually that bothered about moving but I can't see them slowing down first-time buyer demand due to rising rents. Prices in the rental market are red hot and people want to get out of it. The first-time buyer, home mover and remortgage markets are strong the adverse market will be worst affected as inflation and rates rise."
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Mark Robinson
Managing Director at Albion Forest Mortgages
"December and January have been our busiest months on record for mortgage enquiries. There is still exceptionally high demand for property in both the new build and second-hand market. We mostly work in the first-time buyer market, and demand is off the scale in that area of the market. We are getting fewer buy-to-let enquiries since the stamp duty holiday ended, but landlords are still looking to increase their portfolios at a steady pace."
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Rhys Schofield
Brand Director at Peak Mortgages and Protection
"December was strong, but January was by far and away our busiest month ever. Even with rate rises, owning a home is still going to be cheaper as well as more secure than renting. You could even say that in fraught and uncertain times, people will put even more of a premium on owning their own home. And guess what, if lenders put up buy-to-let mortgage rates, landlords are going to put up rents too."
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Rob Gill
Managing Director at Altura Mortgage Finance
"January saw the usual flurry of enquiries from those New Year resolutions to move house, sort out the finances or get that home improvement done. A bit like joining the gym however, whether these resolutions will last now January's been and gone is equally debatable."
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Graham Cox
Director at Self-Employed Mortgage Specialist SEMH
"We're quite bearish on the outlook for the mortgage market in 2022. The stamp duty holiday last year brought forward a lot of transactions and turbo-charged prices. But batten down the hatches, because once people see April's energy prices and the National Insurance increases hit home, alongside the expected Bank of England base rate hikes, sentiment could change fast. It's only ultra cheap credit propping up the housing market at today's over- inflated prices. We expect house prices to fall in the second half of the year. Let's face it, a correction is long overdue to make the property market affordable again."
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Rob Peters
Principal at Simple Fast Mortgage
"The property market has Tom Stoltman-like strength right now. Though there have been some signs that an element of normalisation is starting to creep in certain sectors of the market, this certainly isn't widespread, and it may take several more Bank of England interest rate increases to placate indefatigable property buyers. The most unwavering buyers are those where a necessity to buy exists, such as first time buyers and families who have outgrown their current home."
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Marcus Wright
Managing Director at Bolton Business Finance
"We are seeing an increase in enquires for the Government-backed Recovery Loan Scheme, for both growth and cashflow. However, despite restrictions lifting, it's still proving difficult to secure commercial loans for retail and hospitality companies. Banks are going to want to see that restrictions are over for good before lending appetite returns fully in those sectors."
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Dashly.com
There's still a significant amount of demand for property, and this is reflected in the fact that approvals nudged up slightly in December. Remortgage activity is also strong, as people seek to lock in ahead of potentially several interest rate increases this year. The property and mortgage markets are facing headwinds in the form of inflation and rate rises, but people are still out to move into different types of home often further away from where they work following the pandemic. The race for space and the new WFH culture will continue to drive transactions in 2022."
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Jamie Thompson
Mortgage Broker at Jamie Thompson Mortgages
"I have seen an increase in enquiries from first-time buyers and movers who are on fixed-term contracts. This has left me wondering whether this is a result of a shift in the terms that employers are choosing to hire workers on. Thankfully there are still lenders around happy to consider mortgages for those on fixed term contracts, even if they've only just begun."