Mortgage approval values climb 26% during the pandemic

Market analysis by real estate debt advisory specialists, Sirius Property Finance, has revealed how the pandemic has impacted the mortgage sector, with the total value of mortgage approvals up 26% compared to the pre-pandemic market. 

Sirius Property Finance analysed mortgage approval data since the start of the pandemic (February 2020) to see how the market has performed compared to the equivalent time period prior to the outbreak of COVID-19 in the UK.

The research shows that on average 74,034 mortgages have been approved on a monthly basis during the pandemic, up from 65,852 per month during the same time period prior. In total, 1,554,704 pandemic mortgage applications have been approved, 12% more than pre-pandemic levels. 

But it’s not just the level of mortgage approvals that have climbed, the total value has also increased notably. 

Prior to the pandemic, the average value of mortgage approvals sat at £12.6bn per month with a total of £264.4bn worth of mortgages approved between May 2018 and Jan 2020. 

Since the outbreak of COVID-19, almost £15.9bn worth of mortgages have been approved on a monthly basis to the tune of £332.9bn in total - a 26% increase versus pre-pandemic levels. 

Managing Director of Sirius Property Finance, Nicholas Christofi, commented:

“It’s quite amazing that, despite a global pandemic, the UK property market has boomed and the not only have mortgage approval levels climbed considerably since February 2020, but the value of these approvals has also taken a considerable leap. 

A pent up level of demand due to prolonged political uncertainty prior to the pandemic has certainly played a factor while the cost of borrowing has also remained at record lows.

Coupled with the incentive of a stamp duty saving, we were always likely to see an increase in buyer activity.

However, it’s no doubt the pandemic itself that has been the driving factor behind an increase in the values being borrowed.

Having been subjected to numerous stints of lockdown restrictions, homebuyers have pushed their budgets for larger homes with more space both indoors and outdoors and they’ve borrowed more in order to achieve this.” 

Mortgage approval data sourced from the Bank of England database.