Some 70% of UK property transactions that have taken place since the market reopened in May last year have been backed by mortgages, according to research by broker firm Enness Global Mortgages.
Enness analysed market data on sales financed by mortgages as a percentage of all sales across all parts of the UK completed between May 2020 and November 2020.
As a whole, of the 387,667 transactions completed during that period, some 270,785 of them (or 70%) were mortgage-backed. However, the figures vary on a regional basis. Indeed, 80% of sales in London were mortgage-backed, falling to 72% in both the West Midlands and the East of England. The South East and East Midlands were also above the national benchmark at 71%.
By contrast, just 64% of homebuyers in the South West made their purchase via a mortgage.
As well as being home to the largest regional percentage of mortgage-backed purchases, London also accounts for the top three highest at local authority level, with Lewisham being revealed as the UK’s mortgage hotspot, supporting 88% of purchases. Lewisham was closely followed by Waltham Forest and Barking and Dagenham (87%).
Beyond the capital, Slough and Crawley are home to the highest percentage of mortgage-based purchases, along with Hillingdon at 86%.
At the other end of the spectrum, just 40% of transactions in East Lindsey have been financed by a mortgage since the market reopened in May of last year. North Norfolk (43%), Argyll and Bute (44%), Torridge, Ceredigion (45%), Scarborough (48%), Rother, South Hams and Pembrokeshire were also found to be among the lowest ranked in terms of mortgage-financed transactions.
Enness Global Mortgages CEO Islay Robinson said: “A lot has been made about the boost in buyer demand due to the stamp duty holiday, but it’s the continued low rates of borrowing that have really been the foundation of this heightened market activity.
“While a stamp duty saving is nice, the ability to secure finance at a much lower rate of interest than historically possible has brought about a major boost to market sentiment in recent years and the impact is clear, with 70% of all transactions financed as such.
“Some lenders have begun to tighten their lending criteria and this could make it harder for those with a less stable financial background to obtain a mortgage. However, it’s unlikely to impact the actual ratio of mortgage-financed buyers in relation to those purchasing with cash, particularly while the Bank of England keeps rates at sub-one per cent.”