There is a growing likelihood that 2021 could be the year of the “forced seller”, which would obviously bring an abrupt end to the current rise in UK house prices.

Hundreds of thousands of home¬owners still need mortgage support and estate agents have reported a rise in sellers under major financial strain. While at the moment, the market is largely protected because repossessions are banned until January, a growing number of homeowners still need to sell up.

However, in the latest UK Finance Household Finance Review – Q3 2020, the growth in mortgage applications throughout the third quarter in the South East and in East Anglia (24% and 21%, respectively) was noted. This matches the numerous reports of increased demand for properties further outside of the commuter belt and beyond, which are well-suited to occasional commutes and homeworking.

UK Finance predicted for the fourth quarter: “We anticipate Q4 showing a return to annual growth in completed mortgages, as the backlog of paused transactions unwind further. Additional stimuli, in the form of the stamp duty holiday and the approaching end of the current Help-to-buy scheme have increased demand to complete mortgages before the end of March next year.”

Other key parts of the report are detailed below.

Covid-19 related payment deferrals
At the start of the first lockdown, the mortgage payment deferral (PD) scheme dominated activity in the mortgage market, with over 1m deferral applications processed and granted within the first two weeks of the scheme’s commencement on 19 March. The pace of take-up lessened after that point, reaching a peak of around 1.8m mortgages – some 17% of all mortgages outstanding – by early June.