BoE comment: Drive to beat deadline sent the sector into meltdown

Commenting on the latest Bank of England Money and Credit report, Jonathan Sealey, CEO at specialist finance provider Hope Capital, said: “The stamp duty holiday has undoubtedly been an effective driver of activity in the housing market, and has ended on a record high in terms of borrowing in June.

“But now the holiday is over, the market needs to get back to a more sustainable level of activity, as the drive to beat the deadline threatened to send the sector into meltdown at times.

“We can already see the levels of approvals starting to drop back in June which is a sign that future borrowing will also slow down. The slight pick-up in the re-mortgage market suggests brokers have the time to focus on those customers a little more now.

“There is a real sense that things are getting back to normal as more lenders are coming back with higher LTV products. But at the same time, it has been a period where the specialist lending sector has been able to demonstrate its flexibility and speed in turning deals around where high street lenders simply haven’t been present.

“As the last 18 months has re-shaped how people think about the space they live and work in, we anticipate that specialist lenders will continue to fulfil that role for homebuyers.”

Published: 29 July 2021