Mortgage Completions Reach Record Highs In Q4 2018

Despite the Intermediary Mortgage Lenders Association (IMLA) speculating that house prices and transactions would remain flat in 2019 amidst Brexit uncertainty, Q4 statistics for 2018 highlighted significant growth in the use of intermediary lenders.

The IMLA figures emphasised that 89% of first-time buyer mortgages were completed during the final quarter of the calendar year, an 8% increase on 2017’s figures of 81%.

Q4 Year-on-year figures for all lending activity also enjoyed a 5% increase, boasting record figures of 87%.

In February, IMLA predicted that intermediary mortgage lending would increase to £169 billion in 2019 and £171 billion in 2020, with mortgage intermediaries rising to 75% and 76% respectively.

As market activity has improved for both January and February, it is thought that IMLA’s original predictions may be more conservative than originally thought.

A recent housing index, carried out by Agency Express, has found that sales increased to 16.9% from 15.5% in February 2018 nationally. However, Brexit uncertainty could be deterring new sellers from entering the market as new listings for February fell from 2.7% in February 2018 to -0.7% in the present.

Kate Davies, Imla executive director, commented: “We have had a robust recovery in lending volumes since the low of 2010, and the continuing combination of steady inflation and low unemployment should underpin the housing and mortgage markets in 2019 and 2020.

“Intermediary-driven lending continues to go from strength-to-strength as more people than ever turn to a broker to find the most suitable mortgage.

“But the mortgage market isn’t fully functioning as one would expect. Record low rates and historically low LTV ratios, coupled with cash and household equity being injected into the housing stock, are more usually associated with a continuing period of recession.

“These are symptoms of a market that has failed to support first-time buyers and those moving up the housing ladder in the way it did for previous generations.

“Although low mortgage rates are supporting borrower affordability, high house prices and regulatory constraints on lending make it harder for borrowers to move onto the housing ladder.

“With the mortgage market now following a gentle trajectory, it is a good time for policy-makers and regulators to reassess the costs and benefits of the present regulatory structure, recognising that the impact on those locked out of homeownership can be considerable and lasting.”

Do you envision the market to remain flat for the 2019? Or, will current transaction levels continue to rise?