Paul Stockwell, Chief Commercial Officer at Gatehouse Bank, comments on the Bank of England's Money and Credit Mortgage data for May 2021
“April’s slump in mortgage borrowing has proved to be nothing more than a blip, with May’s monthly lending more than doubling that of the previous month.
“The discount reduction, from £500,000 to £250,000, may be just hours away but there are no signs demand is drying up, as mortgage approvals continue to surpass pre-pandemic levels. This indicates that home-buying demand is not being primarily driven by stamp duty tax breaks, but by an appetite for more space and a desire to ascend the property ladder.
“Thanks to the shifting stamp duty holiday deadlines, 2021’s property market has thus far been a rollercoaster, and the ride is likely to continue the same surge and retreat pattern in mortgage lending in June and July as we cross another stamp duty boundary. A similar recovery will inevitably follow in August when the whole process starts again, albeit on a smaller scale, as the final discount ceases at the end of September – and this is expected to be further buoyed in major cities with the return of international travel opening the way for overseas investors to re-enter the market.”