Mortgage approvals hit 820,000 as buyers rush to beat Stamp Duty deadline

Purchasers racing to beat the stamp duty holiday deadline put the housing market into overdrive, with more than 820,000 mortgages approved in 2020.

The final months of the year added an extra boost to an already-frenzied market and, according to the Bank of England, an extra 103,381 loan applications were approved by banks and building societies in December. This marks 2020 as the the biggest year for mortgages since 2007 and represents a sharp turnaround from the first lockdown, in May 2020, as mortgage approvals slumped to a record low of fewer than 9,400. This compares with just under 790,000 mortgage approvals in 2019, prior to the coronavirus pandemic.

Separately MPs have warned that buyers who had entered the market because of the tax holiday would now be forced to pull out of housing chains, causing a widespread collapse of sales, as a petition for a six-month extension of the stamp duty holiday, which has received more than 139,000 signatures, has been debated in parliament.

Labour MP for Erith and Thamesmead, Abena Oppong-Asare, warned: “The overheating of the market now looks set to be followed by a crash of many people’s sales” and added, “Hundreds of thousands of homeowners are in a position where they must either proceed with a purchase they cannot afford or forego it, losing the money they have spent on fees that they cannot get back.”

Conservative MP Greg Smith said: “Those at the greatest risk of pulling out are those on low and middle incomes who cannot afford extra bills.” Conservative MP for Thirsk and Malton, Kevin Hollinrake, urged the Government to taper the end of the holiday so that buyers who had secured a mortgage offer by the end of February had a further three months to complete after March 31.

The Financial secretary to the Treasury, Jesse Norman, said he could not comment on tax policy outside of a fiscal event, but that the Government would listen to concerns.