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Robust housing market recovery expected to continue

Mortgage rates still dropping

The property and mortgage markets continue to defy the odds with strong activity continuing into the third quarter of 2021.

Despite the end of the Stamp Duty holiday, activity has continued apace. This has led to the Intermediary Mortgage Lenders Association (IMLA) upgrading its projections for gross mortgage lending in 2021 from £283bn to £285bn1 . Executive Director of the IMLA, Kate Davies, commented on the data, “Following a difficult period in the wake of the coronavirus crisis, it is very encouraging to see yet another positive prediction for the remainder of 2021. Our findings forecast that 2021 will see the highest level of mortgage lending since 2007 and, with a combination of government support helping to underpin new purchases and a bumper year for product maturities, we expect this high demand to continue.”

Homes still in high demand

Provisional HMRC data2 suggests that 98,300 property transactions took place in August, 32% up on July and further proof of continued strong demand despite reduced tax savings. It would appear that there are other factors at play in the ongoing property market boom, including low mortgage rates, buyer demand for more space due to the pandemic, and the return of first-time buyer mortgages bringing this group back to the market. Interestingly, in Scotland, where the Land and Buildings Transaction Tax reduction ended in March, data shows that buyer momentum has been resilient and house prices have continued to rise.

Mortgage rates still dropping

Recent data3 shows that average mortgage rates for two and five-year fixed deals have fallen at their fastest rate in 16 months. People looking for high loan-to-value mortgages now have considerably more choice than a year or so ago. The competition between lenders and the rates they are offering is intense.

Deals aren’t lasting long, however, so for advice on the most suitable mortgage for your circumstances, get in touch.

1 IMLA, 2021, 2 HRMC, 2021, 3 Moneyfacts, 2021