The boss of Spicerhaart’s mortgage broking arm has called for a Stamp Duty cut for everyone as bank data revealed yet another slump in mortgage approvals for house purchase.
Banking trade body UK Finance estimates that high street lenders approved 45,549 mortgages for home purchase last month, down 3.8% annually.
Meanwhile, remortgages continued to dominate the market, with approvals growing 18% annually to 31,748.
John Phillips, group operations director at Just Mortgages and Spicerhaart, said Stamp Duty was stifling the whole market so it would be better if that tax was cut for everyone.
He said: “This spike in remortgaging is most likely due to short-term deals coming to an end and home owners looking to lock in low rate fixed deals amidst ongoing speculation that rates will go up later in the year.
“For house purchase to really pick up, the Government needs to think about making some real changes. First-time buyers have seen some good initiatives – Stamp Duty cuts and Help to Buy – but they are obviously not enough to really get things moving.
“Data released by Hamptons International revealed that it now takes an average of ten and a half years for first time buyers to raise a 15% deposit, rising to 17 years for a single Londoner.
“This is crazy – it shouldn’t be that difficult for people to purchase their first home and more needs to be done to help. Ideally, I would like to see Stamp Duty cut altogether, for everyone, because it is really stifling the market.”
Eric Leenders, managing director of personal finance at UK Finance, said: “May’s increase in mortgage approvals was driven by strong growth in remortgaging, as a large number of fixed-term mortgages came to an end and home owners took advantage of a competitive market to shop around for attractive deals. Increased efforts by lenders to contact their customers before their current mortgage deal expires have also contributed to this rise.”
Commenting on the figures, Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “This is more of a spring bump rather than bounce as approvals for house purchases were lower at a time when we would have expected increased activity, even though gross lending is considerably higher, boosted by remortgaging.
“Many buyers and sellers are sitting on their hands and those that are recognising the new reality in this price-sensitive market are negotiating hard but transactions are taking longer as a result.
“Encouragingly, the number of listings and viewing appointments is rising, but choosy buyers are taking their time to make decisions.”
Source: Property Industry Eye