UK Housing Market is Starting to Stabilise

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The Bank of England has released their latest Money and Credit statistics which has shown that mortgage purchases have fallen to pre-pandemic levels. The number has decreased from 71,900, to 67,200.

Figures show that the level of purchase levels in October was closer to pre-pandemic averages of 66,700 in the last 12 months to February 2020.

In October, it has been revealed that people borrowed less in terms of net mortgages which amounted to £1.6bn in October. This was less than September’s figure which stood at £9.3bn. October’s figure is the lowest since July 2021 which saw individuals repay £2.2bn of mortgage debt.

Gross mortgage lending also fell in October from September’s figure (£30.7bn), to £19.3bn. Not only this, gross repayments dropped to £18.2bn from £20.6bn In September.

Lucian Cook, head of residential research at a popular estate agency, commented: “There is no great surprise to see a fall in the number of mortgage approvals in October given the distortive effect of the end stamp duty stamp duty holiday in September.

“But if we dig a little deeper and look at the number of approvals for house purchase in the past three months, we can see that they are now running at about 7% above normal pre pandemic levels; down from 54% at the beginning of the year and 28% at the half year point. That suggests parts of the market are beginning to normalise after a remarkable burst of activity.

“Indeed, our analysis shows that in the year to the end of September, we saw total spend in the UK housing market exceed £500bn for the first time ever and that, at £513bn, this represented an increase of £170bn increase on pre-pandemic levels.  That reflected the unusual coming together of three key factors, the so-called race for space as people looked to trade up the housing ladder, the cheap cost of mortgage finance and the added impetus of a stamp duty holiday.

“Activity in the more expensive price brackets continues to hold up strongly, so we expect to see higher than normal spend in 2022, though it’s difficult to see how spending next year can match the extraordinary levels of late across the market as a whole without such a mix of strong drivers.  This supports our expectation that house price growth will slow to 3.5% next year.”


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