Majority of transactions since May 2020 backed by mortgages
Aside from the market boost provided by the extended stamp duty holiday, it’s clear that the property market is seeing high levels of activity due to the continued low rates of borrowing for mortgages.
Since the market reopened in May 2020, mortgages fuelled 70% of property transactions in the UK.*
Whilst the stamp duty savings have been a tremendous help to many, the ability to secure finance at a much lower rate of interest than previously before has brought a massive boost to market sentiment.
Recent data showed that 270,785 of the 387,667 properties sold have seen the buyer backed by a mortgage, however, there are some regional differences.
– In London, 80% of all sales came from homebuyers with a mortgage
– For the East of England and the West Midlands, this accounted for 72% of sales
– In the South East and East Midlands it was 71%
– The South West had the most cash buyers, with just 64% buying via a mortgage
Some lenders around the UK have started tightening their belts with their lending criteria, potentially making it harder for those with a less secure financial background to be accepted.
But this isn’t likely to impact the ratio of mortgage-financed buyers in regard to those buying with cash.
The new mortgage guarantee scheme has also added incentive to more and more people enquiring about mortgages.
Encouraging lenders to offer 95% mortgages by taking on some of the risks involved, the government’s scheme has proven successful so far, with over 78 fixed-rate 95% deals available right now, compared to five at the beginning of March.
If you would like more information, please get in touch today.
*Enness Global Mortgages
This article was originally published by BriefYourMarket and is reproduced here with their permission.
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