Key Mortgage Trends Update

The latest UK Finance Mortgage Trends data released yesterday (Wednesday 15th January) reveals a turbulent and challenging 2019 for conveyancers and property industry as a whole.

Key data highlights, found that 30,620 new first time buyer mortgages completed in November 2019, nearly 11% fewer than in the same month in 2018.

While, there were 30,750 homemover mortgages completed in November 2019, again nearly 11% fewer than in the same month a year earlier.

This latest data exposes the grim reality of home-purchase activity in 2019, revealing a much stronger market in November 2018.

Furthermore, there were 18,610 new remortgages with additional borrowing in November 2019, 5.7% more than in the same month in 2018. For these remortgages, the average additional amount borrowed in November was £51,470. There were 18,470 new pound-for-pound remortgages (with no additional borrowing) in November 2019, 12.4% fewer than in November 2018.

In addition, in terms of new buy-to-let home purchase mortgages completed, there were 6,300 completed in November 2019, 4.5% fewer than this time last year. There were 15,000 remortgages in the buy-to-let sector, 5.1 per cent fewer than the same month in 2018.

John Phillips, National Operations Director at Just Mortgages, shares his thoughts on the latest UK Finance Mortgage Trends data:

“These figures are evidence – if any were needed – of the damaging effect of political uncertainty on the market. Completions falling by ten per cent year on year, for first-time buyers and home-movers alike, is a sure sign of people holding off on making big decisions.

“Since these figures were collected, of course, there’s been an election and there’s a much greater sense of direction after what seems like an eternity of drift and delay.

“We’re already seeing a strong start to the year and confidence beginning to return to the market. There’s a real sense that people are putting the whole Brexit issue behind them and getting on with their lives.”

The conveyancing industry has been put through its paces and subjected to a multitude of change which shows in the data where political uncertainty has had a real impact on the house buying market.

However, the general election and a clearer Brexit outcome which was announced at the end of 2019 has given the property industry more transparency into the UK’s future.

Richard Pike, Phoebus Software sales and marketing director, said:

“It is hardly surprising that the figures for new mortgages are down on 2018 when, as we were only a few months away from the first Brexit deadline, there was flurry of activity. What the figures do show is that although there appears to have been a lack of confidence to move or buy for the first time, this was not necessarily based on affordability.

“The fact that remortgages with additional borrowing increased shows that perhaps people were more inclined to make more of what they have rather than move. Of course, one other factor that has nothing to do with politics or uncertainty is stamp duty. This is still a major sticking point and one that many will be hoping is tackled by any housing strategy the government comes up with. Now that the Budget date has been announced we won’t have long to wait to find out.”

Jonathan Sealey, Hope Capital’s CEO, commented:

“Despite the rafts of mortgage deals available towards the end of last year it appears, from the drop in new mortgages and the increase in remortgages, that many people were feeling cautious about moving or buying whilst the country was in a period of political turmoil.

“Now that we have a stable majority in government and, hopefully, we can see an end to the shenanigans surrounding Brexit we should also see a degree of confidence return. That’s not to say that I expect a quick return, but perhaps the next few months will see a turnaround. The problem then will be the age-old one of supply, but perhaps that’s jumping the gun somewhat. For now, it’s good enough to hope that people are feeling more confident and ready to get on, where they may previously have been waiting in limbo.”

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