According to PropertyWire, more mortgages were agreed for early 2021 that at any time since the financial crisis. Around 87.7 billion pounds worth of mortgages were agreed at the end of 2020, to cover the current period – some 24.2% more than a year earlier and the most since before the global financial crisis. But despite the mortgages boom, some Brits are distrustful of the process:
Speaking to PropertyWire about the boom, personal finance analyst at Hargreaves Lansdown, Sarah Coles said:
“The race for space has turned out to be more of a marathon than a sprint.
“We’ve been snapping up mortgages at the fastest rate since the onset of the financial crisis – and that was even before we knew the stamp duty holiday would be extended. However, not everyone is in this particular race, and some homeowners are completely exhausted.
“The mortgage market was booming at the end of last year, and the mortgages being agreed for the start of 2021 were at their highest for 14 years. This was even before the stamp duty holiday extension, which is likely to have brought more reluctant buyers back to the fray.
“But not everyone is enjoying this boom. If you need a mortgage with a high loan to value, deals are thinner on the ground than they have been at any time since 2007. In this context, you can understand why the government decided to step in and offer guarantees for high LTV mortgages.”
However, due to the situation with Covid-19, arrears are starting to grow, and they now stand at 0.93% compared to 3.64% in early 2009.
Gatehouse Bank’s chief commercial officer Paul Stockwell, told PropertyWire:
“The value of new mortgage commitments has hit a 14-year high, propelled largely by homeowners who aspired to move to bigger properties while under lockdown restrictions, and who quickly capitalised on the stamp duty incentive when it was announced last summer.
“Their activity meant the annual growth rate for these new mortgage commitments nearly quadrupled in the final quarter of 2020.
“The stamp duty extension announced in the Budget last week will help to ensure many of these mortgage agreements carry through to completion and gross mortgage advances in the first three months 2021 are likely to be strong.
“It’s becoming evident that the stamp duty holiday’s stay of execution will mean sustained high levels of mortgage activity through to the summer as another busy house hunting season gets underway now that schools are reopening and the weather is improving.”
And North London estate agent, Jeremy Leaf – a former RICS residential chairman, concurred:
“Although a little dated, these comprehensive figures clearly illustrate the tidal wave of transactions trying to take advantage of the stamp duty holiday, prior to its recent extension.
“Since a pause in January and early February, speculation about the 31 March deadline being moved, easing of lockdown and success of the vaccination rollout, have all resulted in the tearing up of many house price fall predictions.
“As a result, we are likely to see a market much more balanced between supply and demand but fewer sales as so many buyers and sellers brought forward their decision-making.”
Brits don’t trust online checks when buying property
Also in PropertyWire this week, a new study has revealed that almost three quarters of Brits (74%) do not believe that property documentation is always handled securely or safely online. The research, conducted by anti money-laundering company, SmartSearch ranked high street banks according to respondents’ reported trust in their ability to handle their property documentation safely, securely and entirely online. This revealed that Handelsbanken was most trusted (although still only by half of the respondents – 50%), followed by First Direct (44%), Nationwide (32%), Halifax (30%) and HSBC (30%). People trust Atom bank the least.
Speaking to PropertyWire about the findings, chief executive at SmartSearch, Joh Dobson said:
“Buying a property online is very convenient, especially during the current climate where people may be worried about conducting such transactions face to face.
“However, it is a big shake up to the industry and consumers alike. The last year has forced many of us to adapt to digital or automated services, but it seems the property market has some work to do to instil confidence in their consumers.
“While online estate agents are on the rise, they need to ensure they are taking the necessary steps to communicate trust to their customers, putting the right systems in place to make the process of buying and selling property online as safe and secure as possible.
“We are certainly seeing steps being taken to achieve this, with the introduction of the new conveyancing taskforce set to tighten up procedures for customers and lawyers.”
In addition to rating their trust in banks, more than half of those surveyed (59%) said that they don’t trust a mortgage application to be carried out safely and securely online either.
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