Would-be house buyers are becoming increasingly concerned that they won’t make the stamp duty holiday deadline at the end of March because of the enormous pressure on the system.
That's the verdict from Jonathan Sealey, CEO of specialist short term lender Hope Capital, who, whilst delighted to see the mortgage market in such good shape, believes there are already strong signs of a slowdown ahead.
His comments come after it was announced the number of mortgage approvals for house purchase surged to a 13-year high in October. Interestingly, with approvals at levels not seen since 2007, consumer credit borrowers simultaneously continued to pay down debt according to the latest Bank of England data.
The Bank of England’s latest money and credit statistics report, released on 30 November, shows that mortgage approvals increased to 97,500 from 92,100 in September to surpass numbers not seen since September 2007.
October’s total was staggeringly over 10 times higher than the figure of just 9,400 recorded in a lockdown blighted May! Perhaps more pertinently the figure was also a third higher than February, the final month before the first coronavirus lockdown came into place.
The mortgage market remained strong overall in October, the report added. On a net basis, households borrowed an additional £4.3billion secured on their homes, following borrowing of £4.9billion in September.
High levels of approvals for house purchase thanks to the Chancellor’s decision to suspend stamp duty on properties worth up to £500,000 has seen borrowing bounce back from a low of £200million in April.
Hope Capital's Sealey said:
“While it’s a good sign that the mortgage market remains robust with the number of approvals at a 13-year high, we may also be seeing the first signs that things are slowing down.
“Net mortgage borrowing, while strong at £4.3bn in October is down on the September figure of £4.9bn, which could indicate would-be buyers are concerned they won’t make the stamp duty holiday deadline of March 31, due to the pressure on the system."
Sealey, who founded Hope Capital in 2011 after working in property for more than nine years, maintains a strong focus on strategic growth adding:
“With no sign that the Government is going to review or extend the deadline, now more than ever people need to look at alternative ways to finance their property purchase.
“High street lenders may be struggling to meet the timescales demanded by investors and home-buyers, but specialist lenders are able to move more quickly to get the deal over the line to benefit from the SDLT holiday.”
As well as a series of dynamic new product launches Sealey has personally driven a transformation in the way Hope does business, most recently with the introduction of new ID verification and messaging technology in partnership with Nivo. He ensures that his values are ingrained in the firm’s ethos of providing high quality, individual service to every client "with transparency, integrity and honesty".
Sealey added:
“My vision for Hope Capital is to be the lender that delivers. Our aim is to provide the level of service that makes brokers and their clients want to come back again and again for all their bridging finance needs.”