In recently release figures, the Bank of England has announced that net mortgage borrowing increased by 76% in May 2022. What does this actually mean? Is it a positive sign or a false flag?
According to the BOE, Net mortgage borrowing on houses purchased to live in increased to £7.4 billion in May 2022, up 76% from the £4.2 billion of lending in April 2022. The 12-month pre-pandemic average mortgage lend is only £4.3 billion so that means that £3.1 billion more was lent than the average in May!
Some more interesting figures released by the BOE show that gross residential mortgage lending increased to £28.4 billion in May 2022 compared to £26.7 billion in April 2022, while gross repayments rose slightly to £21.8 billion in May from £21.6 billion in April due to rising lender interest rates.
Mortgage loan application approvals rose very slightly to 66,200 in May 2022, from 66,100 in April so no real difference there and the 12-month pre-pandemic average is higher at 66,700 so it looks like lenders are still not approving as many loans as pre-pandemic.
Content and communications manager at Oportfolio mortgages Louis Mason had this to say: “Is this a sign that the property and mortgage market is NOT slowing down? I attended an event this week where the dreaded R word (recession) was thrown around quite liberally and as human beings, we like to think and discuss the worst possibility before we look at the potential positive outcomes.
Of course, you’d have to be blind not to see that the country is in a bit of economic turmoil. Whether you think this is because of the Russo-Ukrainian War, or the fallout from the COVID-19 pandemic, or both, we are at a point where something big is going to happen. And the news definitely likes to catastrophise every angle. It would be quite easy to assume that rising interest rates and rising house prices would deter new mortgage borrowers but that is clearly not the case. Of course, we can’t say for definite what will happen and there may be a time when people lose confidence in the property market. But we like to look on the Brightside and take a positive spin on the news and these figures released by the BOE are definitely a positive in our opinion.”
If you or anyone else you know is looking to get a new mortgage or purchase a property and you want to know more about what you can borrow, please feel free to give our team a call today to discuss things.