The high demand for mortgages witnessed since the UK emerged from the first Covid-19 lockdown should continue, despite the latest coronavirus restrictions, thanks partly to the Bank of England’s decision to boost its quantitative easing stimulus package by £150bn.
The housing market has seen heightened levels of interest from buyers seeking to press ahead with their housing plans since reopening in May, with many purchasers looking to take advantage of the current stamp duty holiday.
“The government’s stamp duty holiday has helped to encourage many hopeful buyers to press ahead with their homeownership plans, providing a much-needed boost to the economy”, said Kevin Roberts, director, Legal & General Mortgage Club.
To help support the UK economy amid a resurgence of Covid-19 cases, the governor of the Bank of England, Andrew Bailey, said it was important that policymakers acted “quickly and strongly”, which is why the Bank yesterday announced a further £150bn of support.
Policymakers have also kept interest rates on hold at a record low of 0.1%.
David Ross, managing director of Hometrack, commented: “While there are some negative economic headwinds it’s encouraging to see the Bank of England maintain this historically low interest rate.
“This, combined with the stamp duty holiday, will ensure demand for mortgages remains high however.”
But with fewer now products currently available, Ross believes that many potential homemovers “will miss out”.
He added: “The impact of Covid on the economy is still not fully clear but the increased QE will help increase spending. We are still some way from the introduction of a negative interest rate but these remain an option for the Bank who could use these to stimulate borrowing and the wider economy next year.”