Mortgage approvals
UK Mortgage approvals are the key leading housing market indicator, in our view. A mortgage approval today typically leads to a housing transition in three months time. However, the current rush of activity in the housing market following a period of closure and the announcement of the Stamp Duty Holiday has led to bottlenecks in the system and transaction times have lengthened, but we expect a mean reversion at some point.
Latest UK Mortgage approvals
Key UK mortgage approval statistics and figures:
- February 2021: 87,669
- Down 9.9% on January 2021
- Up 19.5% on February 2020
- 5 year average 67,300
- 10 year average 63,500
- 20 year average 76,800
- Average since Oct 1986 83,600
Chart of recent UK mortgage approvals
The data for this chart can be found at the end of this article
UK mortgage approval commentary
UK mortgage approvals in February 2021 were 30% above their 5 year average level. It is remarkable that mortgage approvals are so high in the middle of a global pandemic. When we are being encouraged to stay at home to protect lives an awful lot of households are moving house. The latest data was collected before Chancellor Rishi Sunak announced the extension to the Stamp Duty Holiday in his March 2021 Budget. The Stamp Duty Holiday was extended from 31 March 2021 to 30 June 2021 with a further, although less generous extension from 1 July 2021 to 30 September 2021. We expect mortgage approvals to increase in the coming months as a direct result of the Stamp Duty Holiday extension. Those buying a house costing less than £500,000 currently have no Stamp Duty to pay. The maximum saving is £15,000, however based on average UK house prices of around £250,000 the average saving is less than £2,500.
Chart of long term UK Mortgage approvals
Credit Conditions Survey
The latest Bank of England Credit Conditions survey (21 Jan 21) reported that mortgage supply is likely to increase in the coming quarter and than mortgage speads to Bank Rate and Swap Rates is likely to narrow. This means that the mortgage rates charged on mortgages is likely to reduce in the coming months
Future publication dates for UK Mortgage approvals
- December 2020 Data - 1 February 2021
- January 2021 Data - 1 March 2021
- February 2021 Data - 29 March 2021
- March 2021 Data - 4 May 2021
- April 2021 Data - 2 June 2021
- May 2021 Data - 29 June 2021
UK Mortgage approval data since January 2018
| Date | Mortgage Approvals ('000) |
| Jan 18 | 66.9 |
| Feb 18 | 64.0 |
| Mar 18 | 63.6 |
| Apr 18 | 63.6 |
| May 18 | 65.0 |
| Jun 18 | 65.6 |
| Jul 18 | 64.9 |
| Aug 18 | 66.2 |
| Sep 18 | 65.6 |
| Oct 18 | 67.1 |
| Nov 18 | 64.5 |
| Dec 18 | 64.3 |
| Jan 19 | 65.9 |
| Feb 19 | 65.3 |
| Mar 19 | 62.6 |
| Apr 19 | 66.4 |
| May 19 | 66.0 |
| Jun 19 | 67.1 |
| Jul 19 | 68.1 |
| Aug 19 | 66.6 |
| Sep 19 | 66.0 |
| Oct 19 | 64.2 |
| Nov 19 | 64.4 |
| Dec 19 | 66.2 |
| Jan 20 | 69.8 |
| Feb 20 | 73.4 |
| Mar 20 | 56.9 |
| Apr 20 | 16.1 |
| May 20 | 9.4 |
| Jun 20 | 40.7 |
| Jul 20 | 67.8 |
| Aug 20 | 86.0 |
| Sep 20 | 92.0 |
| Oct 20 | 97.3 |
| Nov 20 | 103.7 |
| Dec 20 | 101.3 |
| Jan 21 | 97.4 |
| Feb 21 | 87.7 |
Source: Bank of England
Bank of England Statistical Tables