The latest figures released by UK Finance this morning have shown that gross residential mortgage lending in January fell by 1.5% when compared to the same month last year. According to the data, £21.6bn went through the books, with the volume of mortgages approved by the main high street banks seeing a marginal increase of 0.3% against January 2018. Home purchase approvals saw a 1.5% rise, remortgage approvals were down 3.1% and approvals for other secured borrowing were up by 6.8%.
This follows several months of strong growth in remortgaging earlier in 2018 as customers took advantage of a competitive mortgage market.
Richard Pike, Phoebus Software sales and marketing director said, “Overall lending in January was 1% down on the same month last year but more starkly it was 9% below the previous six-month average. We are not very often surprised by the figures these days, and to be honest the picture the figures paint for January is probably more encouraging than we might have hoped. Unfortunately, there is nothing going on in Westminster or in Europe that is helping to alleviate the situation, and neither will it for some time.
“However, there is a resilience that shows there are still people that want, and need, to buy and nothing in the political arena will change that. The next few months will be telling, we could be looking at an even less rosy picture in a couple of month’s time, or we will see that despite uncertainty people carried on regardless .”
Dilpreet Bhagrath, mortgage expert at Trussle said, “It’s clear that current economic uncertainty is casting a shadow over the property market. Those hoping to move seem to be most affected, adopting a wait-and-see approach while Brexit looms. Remortgaging activity is also down slightly, but is continuing to tick over as expected as many homeowners seek to lock in a fixed-rate deal with a view to riding out any potential rate rises linked to Brexit.
“The ongoing shortage of available homes is limiting options for buyers in some areas, but there are some good deals to be had particularly for first-time buyers who are ready to move quickly. Those who do find their dream home might want to consider a fixed-rate mortgage if they want to know exactly how much they’ll be paying each month, avoiding instability and providing extra piece of mind.”
John Goodall, CEO of v said, “This dip in lending is unquestionably linked to homeowners and landlords putting off the decision to put their property on the market. This ‘wait and see’ approach, entirely understandable in the current economic climate, is exacerbating the chronic undersupply of available housing.
The current stalemate means that it falls to landlords, both private and institutional, to pick up the pieces and provide quality housing for those who would be buyers in more normal economic conditions.”