No one, even the versed economists could expect that the UK housing market will make such a laudable comeback. Their estimation was of a rise of 34000 in the mortgage approval in June, but the market gave a figure of 40,000.
The progress is drastic and surprising as in May. The same data was only 9,300, and the difference is significant and promising. It was not expected; however, the desperate desire of the borrowers to get back to a routine is one of the reasons behind it. Lenders also are trying to provide the best possible support to the property buyers and mortgage seekers.
Property buyers are doing great despite covid-19 after effects
If at one side the fear was that due to the threat on career and financial stability, people would not be able to make big purchases like property. However, the other fact perhaps remained neglected, which says that due to lockdown, people had not many expenses. They stayed at home, which saved a lot of money on the daily commute. The new buyers could save more for deposit as those who were in the job were working from home and were getting regular salaries.
Sudden lifestyle change helped people stay financially stable
All the time during the corona pandemic and lockdown, only one thing was popular in the headlines. The media was filled with the news of destroyed economies and derailed the personal finances of the people. Yes, that was not wrong, but at the same time, the attention of the world was missing something essential. Something that later established as a fact.
Last three to four months of lockdown were challenging but also gave a chance to many to plan for their financial goals. Their monthly budget remained on track due to the home stay duration. The uncontrolled expenses on eating out, shopping, weekend trips that used to such a lot of money, stopped suddenly.
Lower rates and stamp duty reduction made the conditions friendly for home buying
To help people and the property market cope with the horrifying conditions of financial issues due to corona, many things were changed. The rate of interest on the mortgage deals was low at the same time the there were deductions in the stamp duty.
With fewer expenses on the interest rates and the tax part, it was apparent for people to take the benefit of the opportunity. However, the issues of higher LTV and more significant deposit demands were always there. But those who could manage that were ready to get on the property ladder.
With a mortgage the demand is also high for remortgage
Just like mortgage approvals are in good situation the demand for remortgages is also at its height. After the pandemic effects, people are trying to get cheaper deals for their mortgage through refinancing. But that too is not a bad thing because such things how the determination of the borrowers to keep the balance. To pay the instalments on time, they are just trying their best. At least it is a far better option than the mortgage payment holidays, which brings loss and more expense in the long-term for lenders as well as borrowers.
Less people may take payment holiday despite the extended period
Recently the mortgage payment holiday period was extended up to October. The situation was such that revival from the money mess was looking tricky. However, just as the household market has reopened again, the job market is back to normalcy.
There are estimations by the economists that as things are getting back to routine now, fewer people may apply for a payment holiday. If this happens, the lost balance of the housing market can come back faster than the expectations.
The government help is always there, and that will help to make thing even better. Fingers crossed!!!