Marijana No Comments

Mortgage approvals: what do the current rates tell us about home ownership in the UK?

The number of mortgage approvals fluctuated throughout 2019, plummeting as low as 62,000 but also going beyond forecast, reaching as many as 67,000. Towards the end of the year, the housing market saw a definite increase in mortgage approvals – reaching 64,994 between November and December – and although the December data* is yet to be confirmed, it’s likely to show a similar result.

So if you’re thinking of getting a new home in 2020 and need to find the best mortgage deal, what do these figures really say about your chances of getting on the property ladder this year?

The current figures show that getting a mortgage still isn’t plain sailing. The housing market has come a long way since the financial crash of 2008, which saw historically low mortgage approval rates of around 26,000 in the November of that year. And although there has been an improvement, it’s still clear that mortgage approval rates haven’t fully recovered to anywhere near pre-crash levels, and they certainly aren’t close to the mortgage boom years of the 1980s where May 1988 saw over 150,000 mortgages approvals (the largest number recorded for the UK).

If we look at home ownership rates, these numbers have not fully recovered from the financial crisis of 2008 either. In 2007, we saw an all-time increase in home ownership rates, sitting at 73.3 per cent, but that number was then at a historic low in 2016, at just 63.4 per cent.

So what is the current rate of home ownership?

Just over 65 per cent – only two per cent over the historic low.

So given the relatively auspicious economic climate, low unemployment, and low interest rates, what’s the underlying reason behind such low home ownership rates?

If we take a closer look at mortgage approvals, there is a downward tendency on remortgage approvals, while net mortgage lending keeps going up – by billions.

People are finding it more difficult to move up the property ladder – a well recorded problem since 2016 – and they are borrowing ever larger amounts to use on housing due to hefty deposits that are unaffordable for most. Mortgage approval rates would go up significantly, if first-time buyers had access to more low-deposit mortgage options that are not guarantor mortgages or Help to Buy.

Want to maximise your chances of getting approved for a mortgage in 2020? Read out guide to mortgages for first-time buyers, which covers deposits and much more.

*All data from Trading Economics

BY ANNA COTTRELL

Source: Real Homes

Marijana No Comments

UK Finance: Mortgage approvals on the rise

Mortgage approvals rose while gross mortgage lending dropped in November, the UK Finance Household Finance Update has revealed.

Mortgage approvals for home purchases by the main high street banks in November were 6.8% higher whilst remortgage approvals were 12.7% higher.

Gross mortgage lending across the residential market in November was £23.1bn, 3.3% lower than in the same month in 2018.

David Hollingworth, associate director of communications at L&C Mortgages, said: “I suppose it’s positive the approvals were quite a bit higher.

“I just think we had some volatility last year and it’s encouraging to see approvals by the banks up quite a bit, with remortgaging even more so which is what you’d expect with the focus on remortgages with political uncertainty.

“This is a more positive story coming into the New Year.”

By Michael Lloyd

Source: Mortgage Introducer

Marijana No Comments

UK Finance: Mortgage approvals rise

Both mortgage approvals for purchases and remortgage approvals rose in October, the UK Finance Household Finance Update has revealed.

Mortgage approvals for home purchases by the main high street banks in October were 3.0% higher while remortgage approvals were up 12.7%.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “As we head towards the end of the year, and lenders jostle for what business there is out there, there are some incredible deals on the market to attract borrowers.

“There was an uplift in people taking advantage of these, with mortgage approvals for home purchase some 3% higher than October last year, while remortgage approvals were 12.7% higher.

“Gross mortgage lending has fallen slightly compared with last October, reflecting perhaps the high level of uncertainty that continues to hamper the housing market as a whole.

“Until the General Election result and Brexit are settled, it looks unlikely that the lack of confidence this is instilling in the market will change.”

Andrew Montlake, managing director of Coreco, said the high street banks have got cash to burn at the moment, so it’s no surprise to see their share of mortgage lending increase.

He added: “The price war on the high street continues to rage and consumers are making the most of it.

“Buyers and homeowners alike are being driven on by the ridiculously low rates available, especially medium- to long-term fixed rates, which will help them ride out the uncertainty that the years ahead will bring.

​”Despite the manifesto rhetoric from both sides of the political spectrum, consumers don’t believe that anything will markedly improve in the housing market and question some of the promises made around house building and affordable homes.”

Gross mortgage lending across the residential market in October was £25.5bn, 0.9% lower than in the same month in 2018.

Sam Harhat, head of financial services at Andrews Property Group, said the Brexit tempo increased significantly in October and yet buyers and homeowners showed the same level-headedness they have throughout most of 2019.

He said: “Activity levels aren’t off the scale, but the property market is ticking over exceptionally well given the political environment we’re in.

“Remortgage activity remains particularly strong as people seek to lock into a lower rate before we leave the EU.

“5-year fixes are proving especially popular as they offer a robust hedge in the medium term.

“Mortgage approvals are also up slightly, as Brexit makes prices more affordable and people, especially first-time buyers, make the most of the competitive rates available.

“Aware that the current uncertainty is their window of opportunity, first-time buyers are particularly active at present.”

John Goodall, chief executive and co-founder of buy-to-let specialist Landbay, added: “While these figures are disappointing, they come as no surprise, considering the economic and political pressures the market has been facing.

“The reality is that lenders are (and have been) ready and willing to lend, instead it’s would-be buyers who need that final nudge to make their move.

“Looking forward, with the election looming, we may finally see the cloud of uncertainty begin to lift – assuming there is a clear parliamentary majority.

“If this does happen, we could see a spike in demand as those who were holding off in recent years consider making their move in 2020.

“With their genuine appetite to lend, lenders will be gearing up to facilitate any increase in demand.”

Jonathan Sealey, chief executive, Hope Capital, said that although the main banks continue to take the lion’s share of mortgage lending, it appears that borrowers are looking at alternatives to find the funds they need such as bridging finance.

He said: “Confidence is still being knocked by the uncertainty of what will happen as far as Brexit is concerned and the purchase market has stagnated.

“As a bridging lender we are seeing more borrowers and investors looking for finance to refurbish and improve property rather than moving or selling.

“It appears that until things are finally sorted out homeowners and property investors would rather sit tight, only moving or selling if they have to rather than because they want to.”

By Michael Lloyd

Source: Mortgage Introducer

Marijana No Comments

UK mortgage lending dips as buyers hesitate due to Brexit uncertainty

UK mortgage lending dipped in October as buyers hesitated due to economic and political uncertainty caused by Brexit and the upcoming General Election.

Gross mortgage lending across the residential market last month was £25.5bn, a dip of 0.9 per cent compared to October 2018.

Mortgage approvals for home purchases by the main high street banks increased three per cent and remortgage approvals soared 12.7 per cent, according to the latest data from UK Finance.

Credit card spending, which amounted to £11bn in October, was 2.3 per cent lower than last year, and repayments were in line with expenditure, demonstrating that consumers are managing their finances responsibly.

Personal borrowing through loans increased 7.4 per cent, and overdraft use was 1.2 per cent higher than the same time the previous year.

John Goodall, chief executive at buy-to-let specialist Landbay, said: “The reality is that lenders are (and have been) ready and willing to lend, instead it’s would-be buyers who need that final nudge to make their move.

“Looking forward, with the election looming, we may finally see the cloud of uncertainty begin to lift – assuming there is a clear parliamentary majority.

“If this does happen, we could see a spike in demand as those who were holding off in recent years consider making their move in 2020. With their genuine appetite to lend, lenders will be gearing up to facilitate any increase in demand.”

Mark Harris, chief executive at mortgage broker SPF Private Clients, added: ‘Gross mortgage lending has fallen slightly compared with last October, reflecting perhaps the high level of uncertainty that continues to hamper the housing market as a whole.

“Until the general election result and Brexit are settled, it looks unlikely that the lack of confidence this is instilling in the market will change.”

By Jessica Clark

Source: City AM

Marijana No Comments

Mortgage approvals drop in August

Mortgage approvals for house purchase declined in August, the Bank of England’s Money and Credit statistics have found.

The number of approvals fell to 65,500 in August, in contrast to the 18-month high of 67,000 in July.

Andrew Montlake, managing director of Coreco, said: “Mortgage approvals for house purchase in August were down on July but held up fairly well once you factor in the seasonal drop-off.

“Three years of delay and indecision have created a phenomenal amount of pent-up demand and that saw house purchase mortgage approvals in August stay at the six-month average.

“Expect mortgage approvals in the Autumn and winter to be even more robust, as mortgage enquiries for home purchase really picked up in September.

“Despite a backdrop of political, economic and now constitutional chaos, the property and mortgage markets are ticking along quite well.

“There may be gridlock in Westminster but most Brits are now getting on with their lives.”

Whilst net mortgage borrowing by households dropped to £3.9bn in August, this followed a strong net flow of £4.5bn in July.

This was in line with the average seen since 2016.

The annual growth rate was unchanged at 3.2%, which is also in line with growth rates seen in the past three years.

Rob Barnard, sales director at Masthaven, added: “We have seen a downturn of lending in August, which may be in part led by the continued political uncertainty and the heightened chance of a no deal Brexit.

“However, despite the fall in net mortgage borrowing, the appetite for purchasing property has remained relatively strong keeping in line with the average seen since 2016.

“It seems that by and large, the market is not too concerned with the political turmoil of late. This is supported by our findings that in our Broker Beat research that found that 89% of brokers are confident about the prospects for their firm.

“The UK is still a desirable place to own a property and lenders are innovating to ease the application process for mortgages to deliver excellent customer service, paving the way for specialist banking to become the new norm.”

Vikki Jefferies, proposition director at PRIMIS, added: “Whilst mortgage lending for August was lower than July’s, mortgage advisers are continuing to do a great job of securing the right deals for borrowers – despite the political and economic uncertainty.”

Kevin Roberts, director at Legal & General Mortgage Club, remained optimistic.

Roberts said: “Wider political uncertainty is undoubtedly on the minds of consumers, but the mortgage market remains strong.

“Housing schemes like Help to Buy and innovation from lenders, such as family support mortgages are giving younger borrowers in particular more options to join the property ladder.

“Competition in the sector is rife and there are also some great deals available for those looking to buy or remortgage, especially if they speak to an adviser.

“These experts can give borrowers access to thousands more mortgages than if they went direct to a lender and 95% of consumers who used an adviser would likely recommend their family or friends do the same.”

Similarly, David Copland, director of mortgage services at TMA, added: “Whilst mortgage lending in August weakened, attractive deals, increased lender competition and the economic climate are incentivising people to act.

“Mortgage advisers are steering borrowers in the right direction and finding the best product for their circumstances.

“Remortgage business is a clear opportunity. Now is the time for advisers to be contacting any customers who are approaching the end of their term.”

Kate Davies, executive director of the Intermediary Mortgage Lenders Association, said that although mortgage lending remains consistent and stable in the face of ongoing political uncertainty, issues in the market still need to be solved.

She said: “Mortgage lending remains consistent and stable in the face of ongoing uncertainty in Westminster.

“Borrowers are still keen to press ahead with their plans to step onto or up the housing ladder and our research shows that advisers remain confident about the future of the mortgage market.

“However, there are still challenges facing the sector that must be addressed. As a priority, we need to replace the Help to Buy scheme, which has supported over 220,000 housing transactions since 2013.

“The market is already responding by providing more options for first-time buyers, such as higher loan-to-value mortgages, but it can still be hard for younger buyers to meet the stringent requirements of the current affordability rules.

“We need more dialogue between lenders, builders, regulators and the government to forge a coherent policy which supports responsible lending on good quality properties designed for younger buyers and those on lower incomes.”

By Michael Lloyd

Source: Mortgage Introducer

Marijana No Comments

UK Finance: Gross mortgage lending increases in July

Gross mortgage lending across the residential market and mortgage approvals both rose in July, UK Finance’s Household Finance Update has found.

Gross mortgage lending across the residential market in July 2019 was £26.1bn, 2.9% higher than the same month in 2018 and the highest since March 2016.

Mortgage approvals for home purchase were 16.4% higher, remortgage approvals were 19.4% higher and approvals for other secured borrowing were 12.7% higher than the same month a year earlier.

Andrew Montlake, managing director of mortgage broker, Coreco, said: “July was our biggest month of the year by a distance and on this evidence we weren’t alone.

“Remortgages were the driving force of the rampant activity levels in July, with households taking advantage of the exceptionally competitive mortgage rates available.

“Lenders are awash with cash and borrowers are making hay while the sun shines.

“First time buyer numbers are also surging, especially among those funded by the Bank of Mum and Dad.

“July was the month when the odds of a no-deal Brexit got a lot shorter and this clearly incentivised people to act.

“Borrowers have become increasingly worried that lenders could easily pull down the shutters in the event of a disorderly Brexit and also increase their rates so they’re getting on with it.

“Similarly, a lot of prospective buyers are wary that house prices could bounce back quite sharply if no-deal proves to be a damp squib and the balance of power swings back to sellers.

“Many people have come to the conclusion that there is as much risk to the wait-and-see approach to Brexit as just getting on with it.”

There were 95,126 mortgages approved by the main high street banks in July 2019, the highest monthly total since July 2009 when the figure stood at 99,970.

Richard Pike, Phoebus Software sales and marketing director, added: “These latest figures from UK Finance are the most encouraging for a while.

“The statistics bear out the regional figures released last week, which showed that across every region, other than in London, mortgage approvals were up.

“Mind you, even in London first-time buyer numbers were up in line with the rest of the country.

“As we know the lending figures for July were for mortgages approved up to three months ago.

“It will be very interesting to see what the figures look like in September and October when the latest HMRC figures showed that property transactions fell considerably in July.”

Gareth Lewis, commercial director of property lender MT Finance, said: “At the back end of the summer holidays, these figures are a nice jump into autumn, and a welcome contrast to the subdued data we have got used to seeing.

“High street banks are lending back at 2009 levels so are loosening their credit a little to encompass more borrowing.

“There is also more demand from people buying property, with home purchases also up, which is great news as it shows transactional flow is happening.”

By Michael Lloyd

Source: Mortgage Introducer

Marijana No Comments

Mortgage approvals hit highest level so far this year

Mortgage lenders approved the highest number of home loans for first-time buyers and movers so far this year during June.

Data from banking trade body UK Finance shows there were 32,760 mortgage approvals for first-time buyers, up 6.1% between May and June 2019.

The number of approvals for home movers increased 9.6% on a monthly basis to 31,000.

However, the figures are down on last year, with first-time buyer approvals declining 1.5% annually and home movers seeing 3.5% fewer loans.

Buy-to-let approvals declined on a monthly and annual basis by 3.6%.

Commenting on the data, Richard Pike, sales and marketing director at Phoebus Software, said: “Given that the country has been in a state of flux for over three years it is hardly surprising that the figures year on year have dipped across the mortgage market sectors.

“When you consider that the mortgages in these June figures were more than likely for applications made in or around the original time we should have been leaving the EU, it is more surprising that the figures weren’t even lower.

“The buy-to-let figures are a concern, but as the next deadline for Brexit nears, there may be some light at the end of the tunnel.

“One way or another we will have a resolution and, despite the government’s best efforts to curb buy-to-let, a resolution should mean that investors that have been holding fire will know whether or not investing in property is once again a viable proposition.

“We may be a nation of home owners but, when buying a home is so expensive, the need for rental accommodation remains as important as ever.”

By MARC SHOFFMAN

Source: Property Industry Eye

Marijana No Comments

Home-buyer mortgage approvals at five-month high in June

The number of mortgage approvals being made to home-buyers jumped to a five-month high in June, Bank of England figures show.

But annual growth in consumer credit, which includes borrowing using credit cards, overdrafts and personal loans, slowed to its weakest level for more than five years.

Some 66,440 mortgages were approved for house purchase in June – the highest total since January, the Bank’s Money and Credit report showed.

Meanwhile, consumer credit increased by 5.5% annually in June, down from 5.7% in May, marking the weakest 12-month growth since April 2014.

The Bank said annual growth in consumer credit has fallen steadily since a peak in late 2016.

Howard Archer, chief economic adviser at EY Item Club, said: “Despite being at a five-month high of 66,440 in June, mortgage approvals were well in the 63,000 to 68,000 range that has broadly held since late 2016.

“They were also not that far above the average of 65,267 seen over the first half of 2019.

“June’s mortgage data tie in with the view that housing market activity got some help from the avoidance of a disruptive Brexit at the end of March, but the overall benefit has been relatively limited.

“Improved consumer purchasing power and robust employment growth has also recently been helpful for the housing market but latest developments have been somewhat mixed, with employment growth in particular showing signs of slowing.”

Commenting on the consumer credit figures, Mr Archer said households “have seemingly become relatively careful in their borrowing amid concerns over the economic outlook”.

He continued: “It is also evident that consumer credit growth has recently been limited by markedly weaker private car sales as this has reduced demand for car finance.

“Meanwhile, lenders have become more careful about advancing unsecured credit – the second quarter of 2019 saw lenders further reduce the amount of unsecured credit available to households and again tighten lending standards.”

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “Monetary indicators provide reassurance that the economy isn’t grinding to a halt ahead of the October Brexit deadline.”

By Vicky Shaw

Source: Yahoo Finance UK

Marijana No Comments

UK mortgage approvals rise in June

The number of mortgages approved in the UK reached one of it’s highest levels in the past two years in June.

Last month the number of mortgages given the go-ahead for house purchases rose to 42,653 up from 42,407 in May and close to April’s two-year high of 42,792, according to data from UK Finance.

Analysts said the spike in approvals could be attributed to the UK avoiding crashing out of the EU at the end of March.

EY Item Club chief economic adviser Howard Archer said: “June’s mortgage data ties in with the view that housing market activity has received some help from the avoidance of a disruptive Brexit at the end of March, but the overall benefit has been relatively limited.

“Improved consumer purchasing power and robust employment growth have also recently been helpful for the housing market.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, added: “Encouragingly, the number of mortgages for home purchase rose in June compared with the same month last year, despite all the continued uncertainty over Brexit.

“Hopefully, the installation of a new prime minister at number ten will effect a positive change for the wider economy and housing market, although it is still very early days.”

Meanwhile, credit card lending growth slowed in June. Net credit card linking contracted from £247m in May to £119m last month.

By Jess Clark

Source: City AM

Marijana No Comments

Mortgage lending down 4%

Gross mortgage lending in the UK fell by 4 per cent year-on-year in June, latest data has shown.

Figures from UK Finance, out today (July 24), showed that £21.9bn of lending across the residential mortgage market took place in June — 4 per cent less than in the same month last year.

High-street banks performed better than the rest of the market, according to the results, as gross mortgage lending from the big lenders only fell 1.1 per cent.

Mortgage approvals for house purchases increased by 2.9 per cent year-on-year as 48,539 consumers were approved in June.

This marked a slight drop from the 49,683 approvals in May but figures were still above average for the year.

Mortgage approvals — where a consumer is told they are eligible for a mortgage but is yet to actually borrow the money — are typically an indicator of how the future mortgage market will fare as these consumers are likely to go on to borrow the funds in the upcoming months.

Approvals for remortgages dropped slightly, by 1.4 per cent, to 29,415. Consumers remortgaging have bolstered the market in recent years and the number of remortgages is predicted to reach its peak later this year.

Steve Seal, director of sales and marketing at Bluestone Mortgages, said today’s figures didn’t show any “major jump” but that government schemes and attractive remortgage deals were continuing to appeal to borrowers.

Gareth Lewis, commercial director of property lender MT Finance, said the high street banks’ uplift in home purchase approvals was positive but could be down to the more attractive deals lenders were pushing.

He added: “Deals are being done. A colleague recently sold his house in the north of England in two days and this wasn’t because it was priced too cheaply. 

“There are people who are willing to get on and buy when an opportunity presents itself.”

Mr Lewis also thought the new prime minister could look at tax and stamp duty to help the property market, noting there were “measures afoot” to help stimulate property sales.

Boris Johnson was announced as leader of the Conservative Party yesterday (July 23) and there have been reports that he would be open to reforming stamp duty.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Encouragingly, the number of mortgages for home purchase rose in June compared with the same month last year, despite all the continued uncertainty over Brexit. 

“Hopefully, the installation of a new prime minister at number 10 will affect positive change for the wider economy and housing market, although it is still very early days.”

Mr Harris added that swap rates continued to fall, with a number of lenders, including Nationwide, NatWest and Accord, cutting some mortgage rates in the past week. 

He thought this downward pressure on pricing was likely to continue as lenders competed for business.

By Imogen Tew

Source: FT Adviser