Mortgage approvals flat line in November 2021

The Bank of England release the mortgage approval data for November 2021 this morning

What they said

Mortgage approvals in November 2021 were 66,964

This was 0.2% lower or 139 fewer approvals than in October 2021

Mortgage approvals in November 2021 were 36% lower (down 37,342) than in November 2020 

Twindig take

It is surprising is how quickly mortgage approvals have returned to their longer-term trend levels following the end of the Stamp Duty Holiday in September 2021. Mortgage approvals in November 2021 at 66,964 and October 2021 at 67,103 are very close to the ten year average of 65,534.

It appears that absent the stamp duty holiday activity in the UK housing market has quickly returned to normal. Perhaps, when it comes to moving home, macroeconomic events do not impact household decisions as much as we may believe. If you have changed job or your family has outgrown its current home, concerns about inflation and COVID are secondary, and if you have to move, you generally do.

The November data relates to a period before the Omicron variant was identified and housing market activity is likely to have slowed, as usual, in December, but all the data following the end of the stamp duty holiday so far points to an orderly and well functioning housing market.

We expect that housing market activity increase in the first quarter of 2022, as the spring selling season takes hold and, hopefully, the economy continues to unlock.

Mortgage rates are, however, likely to rise this year, but in our view, this will temper house price growth rather than the level of housing transactions.