Mortgage approvals for house purchases rose to 74,000 in January, above the 12-month pre-pandemic average up to February 2020 of 66,700, according to the latest figures from the Bank of England (BoE).
Brits borrowed £5.9bn in mortgage debt, up from £4bn in December and above the pre-pandemic average of £4.3bn.
Gareth Lewis, commercial director of property lender MT Finance, said: “January is generally expected to be one of the quieter months for the housing market and yet this year, that hasn’t been the case.
“Consumer confidence in terms of people looking to transact, which is demonstrated in these figures, is reflected in what we have seen, as we have enjoyed our best ever month in our 14-year history. February has followed a similar trend, with a huge amount of positivity out there among buyers.
“It will be interesting to see what happens over the coming couple of months with regard to purchase transactions.
“We are likely to see a further increase in base rate and with the bigger lenders starting to raise their mortgage rates, borrowing costs are set to edge up across the board.
“This may see people clamour to get deals done sooner rather than later, focusing minds on low rates while they are still available, and mean a continuation of these positive figures.”
Dave Harris, CEO, more2life, added: “Today’s findings are a welcome confirmation that mortgage market activity remains robust in spite of wider economic concerns.
“Activity is levelling out from the volatility we saw last year and returning to strong and stable pre-pandemic levels.
“Although the road ahead looks promising, inflation is likely to act as a speedbump. With many borrowers’ saving accounts and pension pots having already taken a hit in recent months, we expect a growing number of older homeowners to turn to equity release to keep pace with the rising cost of living.
“UK house prices have seen record growth in recent months, making the chance to unlock this added equity a silver lining for many.
“As such, Q1 will see equity release become an increasingly attractive means to augment retirement income and afford a comfortable later life.”
Jonathan Stinton, head of intermediary relationships at Coventry Building Society, concluded: “2022 is off to a strong start with both purchase mortgage and remortgage activity higher than pre-pandemic levels.
“Demand clearly remains high, with many buyers likely wanting a property to fit their changing needs, and many of those remortgaging looking to secure a competitive rate amid rising costs. These factors, as well as rising house prices and mortgage rates, mean that we’re most likely to see the market grow at a slow and steady pace over the coming year.
“With all of these considerations playing on clients’ minds, it’s times like these that brokers can truly add value, helping their clients to find the right mortgage for their needs and circumstances.”
