Mortgage Borrowing At The Highest It Has Ever Been

Recent news that mortgage borrowing has reached an all-time high is great news for developers and those looking to sell their homes or other properties. The record high shows that more people are moving home and suggests a shift away from renting towards buying. There are many reasons for this change including the extended stamp duty holiday, but the impact that this will have on the housing market in months to come is still being assessed.
In March 2021, according to the Bank of England, the population borrowed £11.8 billion more on mortgages than they repaid, with a gross mortgage borrowing of £35.6 billion. This has put net borrowing at its monthly highest since the start of recording comparable modern data in 1993. The current low Bank of England interest rates directly resulted in low mortgage rates, making borrowing and mortgages even more popular.

Eighty-three thousand new mortgages were approved in March, which is up from 73,000 mortgage loans approved in February 2020, at the start of the Coronavirus pandemic and first national lockdown, showing an increase in those looking to move home

During this time, the production and manufacturing industries including those focused on building new commercial and residential properties have continued to steadily grow for the eleventh month in a row. This suggests that the new properties looking to go on the market in the coming months are going to be met with huge demand which in turn raises prices.

A Market Boom

Due to the increase in borrowing, property prices are also on the increase, with Nationwide Building Society announcing an average price increase of almost £16,000 for the year ending April. This puts the average house price at nearly £240,000 and is expected to continue rising this year.

Economists believe that the market boom is mainly being fuelled by high-income groups, whose jobs were not affected by the pandemic. This also suggests an increased demand for higher-end homes, more complex and unique builds, or investment properties as this is unlikely to be the first home of someone within this group.

The Stamp Duty Break Extended Until June

The stamp duty holiday, which has been repeatedly extended during the period of the pandemic, continues to see homebuyers rushing to take advantage of it before it expires. The stamp duty holiday was extended until June 30th, 2021, and the buyers demand does not seem to slowing.

The tax rate will increase through July, August, and September, ending on September 30th, 2021. The stamp duty will then return to normal pre-COVID-19 levels on October 1st, 2021. Due to this it is expected that the housing market will slow during these months in comparison which could in turn cause a drop in prices but the long-term impact of this is still being monitored with much debate surround the ‘post covid’ housing market.

If you are looking to complete your build please get in touch with BLG to see how our finance options can help.


"A challenging site like no other with every inch of the plot being built on and 12 apartments built-out through a driveway 2.5m wide off of a main high street with limited access rights, not to mention all the complexities associated with 13 Party Wall Agreements. Most lenders would not have had the vision for the scheme or the confidence in Spiller Builders to build out the scheme.  I just wanted to say how helpful the entire BLG team have been during the build. A very approachable and knowledgeable team, with a “can do” approach to lending. We will be looking to do more business with you for sure."

“We have used BLG for development finance for over 8 years. During that time we have found their knowledge and expertise in the property development industry to be second to none. Their loan process, pragmatic and flexible approach to lending and flexibility when required has supported our business needs throughout the period and provided us with support to deliver new homes in Bristol and the surrounding areas.”

“As property developers you never know the curve balls that you may get and a project that is great on paper may prove a bit more tricky.  This happened to us on a project that BLG have funded and throughout they have supported us.  Our business likes to be collaborative and when we hit those tough moments it really felt like we were working as a team with BLG.  If you have a decent project you can get it funded, but what you really need is a business that is there to support and advise you as well.  For us on this project it was BLG.”

“I approached BLG Development finance with an opportunity I had in Chesham, Buckinghamshire, to build 5 new build houses in 2021. My main contact was Anil Bains who is a Director covering Asset Management. Within very quick timescales, BLG provided me with indicative quotes in regards the finance levels they could offer me. Having considered those levels, I requested a valuation to be carried out which again was dealt with swiftly. We proceeded to completion. The build went very smoothly with monthly monitoring being carried out by BLG and monthly drawdown requests dealt with in a very timely manner. Due to a difficult time generally in the market in regards selling, I was in need of a six-month extension to the loan which again was appraised very quickly and granted. Having dealt with numerous funders over the last 20 years, I can only speak highly of my personal experience with BLG and would very confidently work with them again on any future projects. “

"From our side it has also been a pleasure working with BLG and the team there. We have found you easy to deal with, proactive in resolving any minor issues that have arisen through the project and shown great flexibility in working with us as a partner. We will certainly like to work with you on future partners."

“I really appreciate your hard work. We really like the way you communicate & I must say I haven't seen many people who are that approachable.”

“A very efficient processing team, dealing with the DD once deal credit approved, through to completion”

“Many thanks for your efforts on this one and getting it approved and sorted so swiftly, very much appreciated. I am sure I will be speaking to your over the coming months.”

“We had other funding options, but chose to use BLG again, as we work well with the team, who always provide very clear information and advice with a friendly approach throughout the funding process. Very efficient and always very helpful.”

“Many thanks Anil, it’s been a real pleasure working with BLG so far.  We’re lining up the next project too”

“We would recommend all staff we have dealt with at BLG, as we are very satisfied with the team and the initial offer/terms presented, then you and the funding team, through to the draw down team at valuation stage.”

“All documents are clear and the way you keep clients informed, all the way along the funding process, is refreshing for us”

“With regard to what should be improved at BLG, we work with many lenders in our business and we do not get the help and response we have had on the two projects with all at BLG on our funding for our developments.”

“We would particularly mention Dave Edwards and Tom Pitts as being central to having a smooth working relationship and being positive and helpful at all times. Their guidance in helping us navigate the project from inception to completion was invaluable. As was their patience, particularly at the beginning. We look forward to many future projects with the BLG team.”

“We would like to express our appreciation for your support on our development in Bristol. We were very pleased that, from the outset, you shared our vision of the project to convert a dated but classical building, that had outlived its usefulness as a school, into unique luxury apartments with views overlooking the city. We found our dealings practical and streamlined. Monthly payments were processed in an efficient and timely manner.”

“BLG are very good at communicating with clients and all documents are very clear and all at BLG are always happy to help.”

    Quick Enquiry?

    We’re here to help.