Mortgage Approvals Exceed Six Month Average

Both net mortgage borrowing and mortgage approvals for house purchases were above the six month averages in December last year.

Net mortgage borrowing reached £4.6 billion in the final month of the decade, £400 million above the six-month average of £4.2 billion, according to the Bank of England’s ‘Bank of England Money & Credit’ data for December.

Mortgage approvals for house purchases, an indicator of future lending, increased in December to 67,200.

This figure remains 1.9% above the six-month average of 65,900 mortgage approvals and highlights the strong end to the year the property market enjoyed.

These figures seem to confirm the turnaround experienced in the property sector since the election result.

A recent survey from United Trust Bank found that 86% of brokers now feel positive about the outlook for their business in 2020.

Furthermore, three quarters (77%) now feel confident about the UK economy in 2020 with two thirds excited about the residential property market.

Richard Pike, Phoebus Software sales and marketing, said:

“The increase in house purchases is something that the industry has been waiting to see.  Last year the bulk of activity was for first-time buyers and remortgages, so it would be very interesting to see what proportion of the recent house purchase approvals were for first-time buyers against that for home-movers.

“With the recent Equity Release (ER) Market Monitor (from Key) revealing a drop in the number of ER transactions last year, it appears that the market is shifting in all directions.  Maybe this shift is actually a sign of things coming back into balance?”

Jonathan Sealey, CEO of Hope Capital, commented:

“The latest figures on lending from the Bank of England reinforce the impression from other data that the property market experienced a strong end to 2019. We’re already seeing this feed through into increased activity this year as well.

“An end to political uncertainty and the resolution to Brexit seem to be providing a short-term boost. Whether that will last, however, will be down to longer-term factors.

“The Budget in March will be a watershed, where we find out what approach the government will take to ‘levelling up’ regional economies and fostering a sustainable revival in the property market.”

Harley Kagan, group managing director of United Trust Bank, commented:

“Whatever your views on the election result, there’s no denying that the Conservative Party’s convincing victory has increased certainty about Brexit actually happening, even if the detail is still unclear.

“It is encouraging therefore that a majority of brokers are feeling positive about the UK economy, the residential property market and the outlook for their own businesses. Whilst being mindful of the unexpected, we share their positivity about the future. People still need homes and someone to build them and SMEs still need to serve their customers. Both will need the advice of trusted brokers and the support of pragmatic and experienced lenders like UTB when it comes to funding their projects and investing in their businesses.”

Do the recent transaction, mortgage and Bank of England data suggest the property market is enjoying a resurgence in 2020?

Today's Conveyancer