The number of requests in May 2015 was up 95% on May 2014. Meanwhile, the total amount requested by those applying for new mortgages was up 77% on May 2014. The number of loans approved by the banks was also up considerably on May 2014. 65% more home loans amounting to a total value that was 64% up on a year earlier were approved during May 2015.
For some months now, the figures for new mortgages have been influenced by people re-mortgaging their properties in order to take advantages of the lower interest rates currently on offer. However, changes to the rules governing the level of VAT charged on renovation work have also served to increase the number of mortgage applications.
Currently, a 6% VAT (instead of 21%) is levied on renovation work carried out on houses that were built more than 5 years ago. From the beginning of next year the lower rate on VAT will only apply to renovation work carried out on houses that are more than 10 years old. Consequently, many people plan to carry out renovation work on their properties this year. The number of loans granted for renovation work was up 60% in May compared with a year ago.