Mortgage approvals - a key indicator of short-term activity in the housing market - beat expectations in June according to Bank of England figures.
The number of mortgages approved by UK banks rose to 40,000 last month after May’s record crash to just 9,300. This June figure was well above the 34,000 anticipated by analysts.
In context, however, even this much-improved figure still languishes 46 per cent below February’s level.
"The mortgage market showed some signs of recovery in June, but remained relatively weak in comparison to pre-Covid” according to a BoE statement.
Even so, agents have welcomed the better-than-expected data.
Jeremy Leaf, the high-profile north London agent and former RICS residential chairman, says: “These numbers are a useful pointer for direction of travel of the housing market in the coming months and reflect what we have been seeing. However, approvals tend to be a little bit in the past so they are not yet recording the increase in demand we have seen since lockdown eased.
“Looking forward, we are a little nervous about prospects for the market once government support eases as many businesses will then have to make big decisions about whether to keep staff on, which will of course have a knock-on effect on buyer confidence.”
And Tomer Aboody, director of property lender MT Finance, adds: “Households are taking advantage of cheap mortgage rates and applying for both new mortgages and remortgaging. Government action regarding stamp duty has prompted a positive reaction within the property market but there is still room for further changes in the Autumn Budget.”
Knight Frank’s relatively new mortgage division suggests the mortgage approval total is just one of a number of improving indicators for the housing market.
"There are many factors fuelling the post-lockdown rebound spanning the recent cut to stamp duty, successive cuts to interest rates, currency fluctuations and tax changes, and as a result everybody from first time buyers to billionaires are active in the property market” explains Knight Frank’s Simon Gammon.
"The banks are now beginning to creak under the weight of all these applications, and we're seeing some of the biggest lenders on the high street temporarily increase the cost of borrowing at short notice in an attempt to control the flow of business” the agency continues.
"How long this surge lasts will depend on the development of the pandemic, and the effect on employment of the wind up of government support schemes during the autumn, but it's clear interest rates are going to remain at or close to record lows for the foreseeable."