Industry reacts to BoE data: "Time to plan the next era of the market"

Conor Murphy, CEO of Smartr365, said that stamp duty needs to change, and that investing in tech will be key to the market's future.

Industry reacts to BoE data: "Time to plan the next era of the market"

Although the Bank of England's (BoE) Money and Credit report for September showed a rush to complete before the end of the stamp duty incentive, high approvals mean there is still confidence to move driving the market, according to Jeremy Leaf, north London estate agent and a former RICS residential chairman.


Leaf said: "Borrowings and borrowing intentions are always a good indicator of present and future direction of travel for the housing market and these are no exception.

"The numbers come at a particularly interesting time when the high borrowings showed buyers and sellers rushing to take advantage of the stamp duty holiday, whereas still relatively high approvals demonstrate a confidence to move even without the support of the concession."

Although there are other concerns on the horizon, such as an increase in the base rate, Leaf said the BoE data suggests that the future looks positive for the mortgage market.

He said: "Looking forward, worries about inflation and mortgage rates, which are even higher since the Budget, do not seem to be reducing activity while demand - particularly for family houses - continues to comfortably outpace supply."

Conor Murphy, CEO of Smartr365, said that the figures, depicting one of the busiest periods in the market's history, show a clear need for permanent change to stamp duty.

He said: "The stamp duty tax break has helped countless borrowers to access affordable deals, and I would like to see permanent changes to the stamp duty thresholds, alongside an increase to loan-to-income ratios and the availability of higher loan-to-value [LTV] products, to help more first-time buyers onto the property ladder."

He agreed that borrowing would continue to be strong in the near future, despite rising rates and the end of the stamp duty incentive.

However, he added: “With various factors putting pressure on an interest rate increase and the stamp duty holiday long-gone, it is now time to plan the next era of the market.

"Investing in mortgage tech will be crucial to brokers’ success regardless of the next step taken by the industry.

"Powerful sourcing tools, strong CRM systems and digital ID verification are among the key tools that leave brokers with more capacity to focus on what truly matters – providing the best outcomes for clients, whatever the market conditions.”

David Whittaker, CEO of Keystone Property Finance, pointed to a slip in mortgage approvals since the previous BoE report.

He said: "While looming hikes in interest rates may be the cause of this dip and could signify bad news for some, we believe that it’s unlikely that an interest rate below 1% will have a significant impact on the market."

"Instead, the approval rate dip could suggest a slight hesitance as buyers continue to find their footing in the market following the removal of the stamp duty holiday.

"Mortgage borrowing is still at all-time highs, so the current level of approvals looks positive.

"Once we have a fuller picture of the impact of the pandemic and how to move forward from its effects, we expect to see the market stabilise."