According to UK Finance’s household update, mortgage lending reached £21.1bn across the residential market in December 2018, up 4.7% year-on-year. Gross mortgage lending across the residential market during 2018 was £267.5bn, 3.8% higher than in 2017.
The number of mortgages approved by high street banks in December 2018 was 2.4% lower than the same month the previous year.
Approvals for home purchases were 5.3% higher whilst re-mortgage approvals were 5.8% lower and approvals for other secured borrowing were 18.9% lower.
Eric Leenders, managing director of personal finance at UK Finance, said: “Mortgage lending grew in December compared to the previous year, with borrowers defying seasonal trends and purchasing a property throughout the festive period.”
Personal deposits in total grew by 0.6% in the year to December, while deposits held in instant access accounts were 2.4% higher than last December.
John Ingram Co-founder of Mortgage Gym, said to LondonLovesProperty, “A turbulent year for the mortgage market ended on a positive note following an impressive number of mortgage approvals in the month of December. Whilst last year saw a further rise in the Bank of England’s base rate, fierce competition between mortgage lenders helped keep rates at a historically low level.
“Many mortgage customers took advantage of the market opportunity to secure a cheap mortgage deal while they last. The intermediary sector continues to invest heavily in in mortgage technology and the new online propositions are creating market transparency and an evolving digital mortgage experience for customers. Despite an uncertain outlook for 2019, the mortgage market has shown that it has the power to battle through tough market conditions”
Managing director of One77 Mortgages, Alastair McKee said, “Despite today’s marginally negative figures this fall in mortgage approvals was widely expected, particularly given the time of year and with the addition of political uncertainty still hanging over the market.
Previous to this drop, we’ve seen mortgage approvals start to build over consecutive months at the back end of 2018 which is a clear indicator of growing buyer momentum.
This positive increase in market activity is certainly something we’ve noticed at ground level with a strong uplift in buyer enquiries and commitment to products across the board, which has been lacking in previous months.
However, while this initial spark may be enough to start the engines, it can’t fuel the UK property powerhouse in the long-term unless it converts to completed sales. With many sellers refraining from the reality of current market conditions in terms of asking price, it could be a few months yet until any notable indicators of market stability filter through.”
Mike Scott, chief property analyst at online estate agent Yopa, said, “The Household Finance Update for last month from UK Finance confirms the upturn in housing market activity that we saw in HMRC’s report of the number of home sales.
“There were 5.3% more mortgage approvals for home purchase than there were in December 2017, which is a significant increase. This should mean that the housing market gets off to a strong start in 2019 as those mortgage approvals progress and turn into actual house purchases.”