Mortgage Market

For 5 months, the UK mortgage market is going through the bumpy roads and unprecedented experiences. After a long duration of mortgage payment holidays, missed payments, financial frustration issues, the property buyers seem to have attained a bit calm. The strain and stain of prevalent destruction due to horrifying corona chaos are there but with some blur.

Mortgage Demand Increased

The United Kingdom has come out from the hibernation of lockdown. Now, the economy is hungry to get some food of action and money; this action is visible in the mortgage market, which has come back to life to provide that food.

According to an update from The Bank of England, the house purchase has reached 66.3 thousand in the UK in July. After the historic low of 9.3 thousand in May, it is laudable progress. BEFORE COVID, in February, the same data was 73.7 thousand.


There is a considerable increase in the demand for mortgages. People with their pending property buying plans are now ready to make their big purchases. The wave of change is showing promising signs, and the mortgage market has new air to breathe in. 

Here is a graphical mention of the varied conditions that the UK property buying has gone through from 2019 to 2020.

Credit - tradingeconomics
Credit – tradingeconomics

Few things are even better than the pre-COVID condition

Maybe the world is shouting due to the massive loss after corona, and yes, conditions became severe in the UK too. However, this bad thing has brought something great for UK property buyers. The first time homebuyers can exploit a considerable benefit through a lucrative decision made by the UK Government.

Stamp duty deduction – Wowww!!

There is a significant decrease in stamp duty. You will pay 0% stamp duty up to £125,000. The decision was destined to inspire the property purchase. After the drained financial capacities of the Britons, it became important to introduce some essential remedies that can help calm down the pain.

Here are the basic stamp duty rates –

UK Stamp duty rates
Property value Stamp duty rate
Up to £125,000 0%
£125,001 to £250,000 2%
£250,001 to £925,0000 5%
£925,001 £1,500,000 10%
Above £1,500,001 12%

Factors that can backfire

Not everything has a rosy image. Few things are still difficult on the buyers and the lenders.

  • The LTV, which has come back to a higher level but stringency on that part, is much more than ever. The 75% to 80% LTV is back, but the affordability rules are stricter now.
  • Those on the furloughed income may not get a mortgage if they fail to provide proof that the employer has the intention to retain them.
  • The attainment of bad credit mortgages is much more challenging now. Depending on the recency of the issues, the deposit amount, LTV, and repayments will be decided. However, an applicant with deposit size of 20% to 50% can get easy approval.
  • The mortgage payment holiday will end in October, and thus no more ray of hope for those who still have financial issues. The borrowers have the deadline of October end 2020 to apply for the mortgage holiday. There are no chances for the extension.


You can see how differently the mortgage and the property market in the UK is acting. But the bigger picture that comes out clearly describes that conditions are getting better.

There are good things to happen, but the time factor is sure to rule the expectations. Sudden revival is not possible as the level of destruction was big enough to shake the whole economy. Fingers crossed, hope for the best because now we have reasons to hope for the best. The UK property market is sure to gain back the normalcy of pre-COVID conditions.