Economist's view: Bank of England - Money and Credit March 2021
Commenting on today’s Bank of England Mortgage Lending figures, Nitesh Patel, Strategic Economist at Yorkshire Building Society, said:
After falling for the past two months, mortgage lending edged down again in March, from a peak of 103,100 approvals in November to 83,735 in March. Mortgage lending remains strong - over the past six months, lending for housing purchases increased by 44%, compared with the same period a year ago. The announcement early in the month that the current Stamp Duty was to be extended from March to the end of June is likely to have fuelled demand, with buyers and sellers rushing to complete sales before the deadline.
TDespite rising prices and uncertainty, housing demand remains strong, though there is some unevenness in the market, with larger, detached residences boasting outside space proving more popular than flats as people reassess their needs following a year of lockdowns. The housing market has also benefitted from the fact that home purchasers are typically from higher income groups but jobs losses have mostly been concentrated in the lower-paid occupations such as in the hospitality sector, which has been hit with a cruel blow by Covid-19.
We expect lending to remain strong in the coming months, as demand remains at an elevated level driven by the current tax cut, low borrowing costs and buyers amassing large savings pots during lockdown.