Mortgage borrowing was at £1.6 billion in October down from £9.3 billion in September. This drop of around 83% is being attributed to the fact many people had rushed through purchases to gain from the stamp duty discount which ended on 30 September.
Meanwhile, the Bank of England data also revealed, the number of mortgage lenders approving borrowing for house purchases also fell in October to 67,2000 from 71,900 in September.
This is significant because it provides and indication of future borrowing and shows the lowest figure recorded since June 2020, which was just before the Stamp Duty Holiday was introduced.
However, far from fearing the housing market is about to fall into decline, experts say borrowing is simply returning to the more stable levels we were used to before the pandemic began.
Laura Suter, head of personal finance at AJ Bell, said: “Rather than gloomy predictions of a housing market coming to a standstill after the stamp duty holiday ended, instead it looks like it’s just returning to-pre pandemic levels.
“Approvals for house purchases, which are a good indication of the future direction of the market, show there was a drop between September and October but to around the average for February 2020, before the pandemic became a factor.”
Properties remain in demand
Meanwhile, estate agents have reported a strong demand of property as potential buyers take advantage of low interest rates on mortgages.
Jeremy Leaf, a north London estate agent and a former RICS residential chairman, said: “These figures are interesting because they demonstrate a tipping point for the property market as the impact of the stamp duty holiday and the number of brought forward purchases was laid bare.
“Nevertheless, we have found at the sharp end there are still many trying to take advantage of low interest rates before their seemingly inevitable increase and buy houses rather than flats which are still lagging behind in the popularity stakes, particularly those without outside space.
“Looking forward, we don’t see too much change although we are expecting the bounce back in listings between December and January to be stronger than usual as buyers and sellers come to terms with the new normal.”
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