According to the BoE, the mortgage market remained strong in October.
The number of mortgage approvals for house purchase rose to 97,500 in October from 92,100 in September, according to the Bank of England’s Money and Credit statistics.
The data shows that this was the highest number of approvals since September 2007, 33% higher than approvals in February 2020 and around 10 times higher than the 9,400 approvals in May.
Approvals for remortgage, which only captures remortgaging with a different lender, were broadly unchanged in October at 32,900 and remain around 40% lower than in February 2020.
According to the BoE, the mortgage market remained strong in October.
On net, households borrowed an additional £4.3bn secured on their homes, following borrowing of £4.9bn in September.
However, effective interest rates on new mortgage borrowing ticked up to 1.78%.
Consumer credit remained weak in October, with households making net repayments of £600m.
Effective rates on new personal loans increased by 37 basis points to 5.15%.
Overall, household and business deposits were strong in October, at £12.3bn and £13bn respectively.
Deposit interest rates remain at historically low levels.
Dave Harris, chief executive of more2life, said: “At the peak of the coronavirus crisis, there was a mass shift away from new borrowing among consumers.
“Many chose to use any surplus income to repay existing debts at a time when job security and the economic outlook for the UK were uncertain.
“Issues in the property market had a similar effect on new mortgage lending as the focus shifted to refinancing.
“Although mortgage lending has gradually recovered over recent months, it has been encouraging to see that new credit borrowing has remained low as households prioritise repaying outstanding balances.
“However, while some have been able to repay debt, others have found their incomes squeezed by job losses or the impact of the crisis on investment returns.
“The older generation and those approaching retirement have been particularly vulnerable and are increasingly considering the role that all their assets need to play in retirement.
“This is where advisers come into their own. By helping those who wish to learn more about their borrowing options in later life, specialists can guide customers to the best solution for their long-term needs – whether this involves taking out a lifetime mortgage, downsizing or looking into other sources of income.”
Vikki Jefferies, proposition director at PRIMIS Mortgage Network, added: “The mortgage industry continued to show positive signs of recovery in October, with today’s figures showing that approvals increased further last month.
“Incentives such as the chancellor’s stamp duty holiday have gone a long way towards driving buyer appetite, while the pent-up demand that succeeded the housing market’s hiatus has further contributed to the industry’s recovery.
“However, while the market continues to work hard to ensure that borrowers can progress with their applications, it’s crucial for advisers to keep protection front of mind during their conversations with clients.
“Many customers continue to face financial hardship as a result of the pandemic and are, understandably, looking for solutions which can protect them and their families from further difficulty.
“It is in an adviser’s best interest to ensure that their clients’ finances are adequately protected so that families are properly supported, both during this period and beyond.”
