UK lending for new mortgages soared by 66.2% in July as pent-up demand and a stamp duty holiday “turbo-charged” the property market in England, official figures suggest.
Lenders approved 66,300 mortgages for residential property purchases in July, up by around two-thirds on the 39,900 approvals in June. The data is from a comprehensive survey by the Bank of England (BoE) published on Tuesday.
Approvals are now only 10% below February levels, and more than seven times higher than the 9,300 mortgages signed off in May in the wake of national lockdown.
It comes after UK chancellor Rishi Sunak announced a temporary stamp duty holiday on purchases under £500,000 ($671,000) in England and Northern Ireland in early July. The threshold had previously been £125,000, albeit with higher thresholds for first-time buyers.
The finance minister had said the measures would “catalyse the housing market and boost confidence,” as the government battles to drag the country out of a deep recession.
Hugh Wade-Jones, managing director of brokers Enness Global Mortgages, said the figures were “astonishing” given the market’s collapse only a few months ago during lockdown.
“There is no doubt that the huge surge of buyer demand seen once the market reopened has been seriously turbo-charged due to the stamp duty holiday announced shortly after,” he added.
The BoE figures also show a slight increase in gross borrowing including new mortgages and re-mortgages to £17.4bn in July. But it remained significantly below the £23.7bn borrowed in February.
It comes as separate figures from estate and letting agents and consultancy Knight Frank showed viewings for lettings had hit a ten-year high in London and the Home Counties at the end of August.
The company said students had driven the surge in demand, as uncertainty over starting university mid-pandemic and the recent controversial release of exam results delayed accommodation decisions.
The rebound in the property sector comes in spite of the dire state of the UK economy and rising job losses.
Government and central bank crisis measures including low interest rates, mortgage re-payment holidays, and the furlough scheme are also seen to have propped up the market.