According to Twenty7Tec’s Mortgage Supply and Demand Report, August saw a “highly unusual” spike in mortgage searches and applications, increasing its five-year average by 222%.
August is usually one of the quietest months for mortgages, but proved to be among the busiest of the year, with more than double that of the average August of the past five years.
Search volumes and the volume of ESIS documents prepared over July and August surpassed the year’s pre-Covid peaks in February and March: the 60 busiest days of the year for ESIS documents were all in July and August.
A key driver behind the unprecedented surge was in UK house buyers taking advantage of the sub-£500k stamp duty cut, with mortgage searches for £250k-£499k properties heavily spiked.
James Tucker, CEO at Twenty7Tec, said, “August’s unusually high mortgage activity shows there is still much to be hopeful about in the market, and the govt’s stamp duty cut has clearly ignited demand among first time buyers. August saw the single busiest day for first time buyer searches this year. Demand is there.
“But, the Government needs to stay vigilant to support the entire market, and do their bit to stimulate the supply side as well as demand, so lenders can adjust their risk profiles and lend confidently to these first time buyers.
“Without addressing the supply side issue, we’ll continue to have a mismatch between buyer demand and lenders who want to de-risk their lending.
“Simply put, without a functioning first time buyer element, the rest of the housing market doesn’t function.”