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Mortgage approvals down slightly in May

Mortgage approvals for house purchases, an indicator of future lending, fell back slightly from April to 65,400 in May, the Bank of England’s Money and Credit statistics has found.

Approvals remained broadly in line with the narrow range seen in previous years.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “The number of mortgage approvals for house purchase, which indicate at what level future lending will be, fell back slightly in May but remain broadly in line with the narrow range seen in previous years.

“It shows that the mortgage market is trundling along quite steadily with no great shocks either way. This is reassuring as there is plenty of political and economic uncertainty, which is preying on people’s minds and creating a delay when it comes to making big decisions

“Lenders remain keen to lend and several have cut rates in recent weeks, so mortgage rates are likely to remain low for a while yet, further supporting the market.”

Net mortgage borrowing by households fell to £3.1bn in May, the smallest increase since April 2017. However, the annual growth rate for mortgage lending remained stable at 3.2%, and has now been around 3% since late 2016.

John Phillips, operations director at Just Mortgages and Spicerhaart, added: “There is not a huge change here; net mortgage borrowing fell slightly, but the annual growth rate for mortgages has remained stable at 3.2%, which means it has now been steady at around 3% for almost three years.

“Approvals, however, were down for both house purchase and remortgaging, which could suggest that lending will fall over the next few months and growth may slow too.

“There is no doubt that it has been a funny old few years for the mortgage market. Brexit has obviously had – and is still having – an impact, but I don’t think it is the only factor at play.

“For many years now, borrowing costs have been very low, but wages have not been keeping pace with house prices, so while mortgages are affordable, deposits and stamp duty are not.

“Those who may have upsized in the past are now either remortgaging to borrow more and then extending, or just saving the money they would’ve used on stamp duty and investing it into their existing homes.”

Phillips said that if the government wants to get things moving again, it needs to do something about the cost of moving, in particular stamp duty.

He said: “People are simply not prepared to throw thousands of pounds that could be used to invest in a bigger home on stamp duty.

“Back in April, the House of Lords Committee on Intergenerational Fairness and Provision recommended changes to stamp duty because, they said it is ‘seriously distorting the market’ and I think they’re right. Until something is done about the crippling cost of stamp duty, the market will continue to struggle.”

The number of approvals for remortgaging fell in May, to 46,700.

Nick Chadbourne, chief executive of conveyancing solutions provider LMS, added: “Remortgage activity figures from the Bank of England show the market is resilient, buoyed by near record low interest rates and high product expiry rates in Q2 this year.”

“In fact, LMS’ latest remortgage snapshot shows that there was a spike in remortgage activity to 53,624 and almost half of those who remortgaged opted for a 5-year fixed rate deal.

“LMS’ data also shows 65% of borrowers expect an interest rate rise within the next year, so we expect the trend towards long-term fixed rate deals to continue throughout 2019.”

Kevin Roberts, director, Legal & General Mortgage Club, said: “The government’s Help to Buy scheme has improved affordability for first-time buyers, and with mortgage lenders increasingly offering 95% loan-to-value products, they have unparalleled access to the finance they need.

“The low interest rate environment has also encouraged existing homeowners to remortgage onto longer fixed-term products – giving them certainty over their future repayment costs.”

By Michael Lloyd

Source: Mortgage Introducer

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UK property market: Mortgage approvals dip from 26-month April high

The number of residential mortgages approved by banks dipped last month, easing back from a 26-month high in April but remaining above the monthly average.

Seasonally adjusted figures show that banks in Britain approved 42,384 house purchase mortgages in May, falling from roughly 42,900 in April but beating the consensus of 41,000.

The actual number of mortgages for home purchase approved by the main high street banks in May 2019 was also 9.1 per cent higher than in the same month in 2018, marking the highest annual level since June 2016.

According to UK Finance, which released the figures this morning, gross mortgage lending across the residential market in May 2019 was £21.9bn, falling 0.4 per cent compared with the same month in 2018.

“May’s mortgage approvals data support the view that housing market activity may well have got at least some temporary support from the avoidance of a disruptive Brexit at the end of March. It may very well also be that the housing market has benefited from recent improved consumer purchasing power and robust employment growth,” said Howard Archer, chief economic advisor at the EY ITEM Club.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “The increase in mortgages for home purchase, rising to the highest level in three years, is hugely encouraging when you consider the political uncertainty which is causing many people to put decisions to move on hold.”

He added: “It suggests a much more resilient market than one might expect, and once a decision is made over Brexit, one way or another, we are likely to see a further uptick in transactions as pent-up demand is released.”

By Sebastian McCarthy

Source: City AM

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Mortgage approvals tick up in April

Mortgage approvals — a leading indicator of mortgage activity and future lending — ticked up in April, according to new data from the Bank of England.

The BoE’s Money and Credit report, published today (May 31), showed the number of mortgage approvals for house purchase rose to about 66,300 in April — up slightly from the 62,559 measured for March.

Mortgage approvals show how many new loans banks have approved and that could be drawn, so capture the early stages of taking out secured lending against a property.

Therefore, they are a key indicator of current market activity and potential future lending.

However the number of approvals for remortgaging was broadly unchanged at around 49,400.

This is a turn in the market, as data released by UK Finance last month showed the number of people getting approved to remortgage increased by 11.1 per cent year-on-year in March and the number of people opting to remortgage is expected to reach a peak later this year.

The bank’s data also showed net mortgage borrowing remained strong for the second month in a row, totalling £4.3bn in April compared with the six-month average of £3.8bn.

The findings showed the annual growth rate of mortgage lending remained unchanged at 3.3 per cent, consistent with the level the market has seen since August last year.

Andrew Montlake, director of mortgage broker, Coreco, said: “Today’s buyer is spoilt rotten. Mortgage rates are obscenely low and, in the majority of cases, buyers are calling all the shots.”

Mr Montlake added that while the passing of the March Brexit deadline will have spurred some into action in April, a broader Brexit apathy was becoming stronger by the day.

He said: “April was the month when activity levels for brokers started to pick up and this was confirmed in the Bank’s latest data.

“People are increasingly of the view that, even if prices fall in the short-term following a potential no-deal Brexit, in the medium-term they will reap the benefits.”

He went on to say that while remortgages had been driving activity for some time, there had been a definitive pick-up in purchases over the past two months.

Richard Pike, marketing director at lending software firm Phoebus, agreed that remortgaging had played a big part in holding up the mortgage market over the past couple of years but said today’s figures showed it was levelling out.

He said: “The trend of people taking advantage of the stamp duty relief to move their current deals will have come to an end and we could see another uptick in the remortgaging figures next month.

“With household debt rising consistently, remortgaging to a better, less expensive deal is one quick way to reduce household spend and even consolidate some debt.

“The number of approvals for house purchase increased, which is a good sign for the whole market. As lenders offer better and better rates and deals, it is a good time for people to move up, or down, the ladder.”

By Imogen Tew

Source: FT Adviser

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Mortgage and business lending rises in April

The level of mortgage lending in the UK rose last month in a sign that the passing of the original Brexit deadline in March has eased fears, according to the Bank of England.

Net mortgage borrowing in April was £4.3 billion with the number of mortgage approvals rising from 49,400 in March to 66,300 last month. Over the previous six months, the average was £3.8 billion.

There were also glimmers of improvements in consumer confidence, with the amount borrowed for goods and services rising to £0.9 billion in April, compared with £0.5 billion in March.

However, the Bank of England pointed out that it was still below the £1.5 billion average seen between January 2016 and June 2018.

Credit card lending fell slightly to £0.2 billion in the period, reversing a boost in March.

Andrew Montlake, director of the UK-wide mortgage broker, Coreco, said that the boost since the passing of the original Brexit deadline could be short-lived.

He explained: “While the passing of the March 29 Brexit deadline will have spurred some into action in April, a broader Brexit apathy is becoming stronger by the day.”

In business lending, the amounts borrowed from UK banks and financial markets increased by £5.7 billion in April, with amount handed out by banks alone rising £4.4 billion.

However, the increase was mainly due to big loans to the manufacturing industry.

Mark Collings, chief commercial officer at debt finance platform CODE Investing, explained: “Despite a continuation of what the Bank’s governor Mark Carney has described as ‘Brexit Fog’, it’s encouraging to see that overall bank lending to business picked up in April.

“The passing of the March 29 Brexit deadline, with all its inherent symbolism, appears to have made some businesses more bullish.

“Drill down into the detail, however, and large manufacturing firms account for most of this increase.”

By Simon Neville

Source: Yahoo Finance UK

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Mortgage approvals increase but gross lending falls

The number of mortgage approvals for home purchases and remortgages increased in April, according to new figures from UK Finance.

Data published today revealed approvals by the main high street banks were 5.4% higher in April 2019 than in the same month of the previous year.

For home purchases, this figure was 8.6% more year-on-year and for remortgages it was 2.2% higher than in April 2018.

In the same period gross mortgage lending in the residential market was £20.3 billion, which was a fall of 1.4% year-on-year.

John Goodall, CEO of Landbay, said: “Mortgage lending remained subdued, and reflected the wider challenges facing the housing market.

“Lenders are having to push down mortgage rates for customers even as funding costs begin to rise, which has led to banks like Tesco bowing out of the market altogether.”

He added that while prices had started to stabilise, until there was clarity on the current political situation it was unlikely there would be any drastic rise in confidence, and subsequently, lending.

Meanwhile, Richard Pike, sales and marketing director of Phoebus Software, said the correlation between the gross mortgage lending figures, which were down, and the number of approvals, which were up across the board, was quite telling.

He added: “As house prices fall, especially in London and the south east, and house buyers also look farther afield into more affordable areas, this gap is only likely to widen.

It is, however, encouraging to see the increase in approvals for home purchase, which does show that people have had enough of sitting on their hands and are making their move.”

Product transfers

UK Finance also revealed 290,000 homeowners switched product with their existing provider in the first quarter of 2019, a decrease of 1.7% year-on-year.

In terms of value, it said this represented £39.2 billion of mortgage debt refinanced internally, which was an increase of 2.1% compared to the same quarter last year.

According to UK Finance, of the total number of product transfers in Q1 of 2019, 161,100 were on an advised basis – a rise of 8.6% year-on-year. These were worth £22.7 billion, an increase 15.3% year-on-year.

Execution-only product transfers went down by 12.1% year-on-year, to 128,900. These were worth £16.5 billion, a decrease of 11.8% compared to the same period last year.

By Kate Saines

Source: Mortgage Finance Gazette

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Mortgage Approvals Reach 9-Month High

Homebuyers and lenders appear to have brushed Brexit uncertainty in March, as mortgage approvals reached their highest level since June of last year.

Industry data from UK Finance, a lobby group for the financial services industry, revealed that high street banks approved 39,980 mortgages in March, up 6% from a year ago and up 2% from February. That’s the highest number of mortgages approved in a single month since June 2018.

The numbers were greeted as a sign that the housing market is rebounding following a slowdown in 2018 as Brexit negotiations stalled.

The figures confirmed the optimistic prognosis from the Royal Institute of Chartered Surveyors (Rics), which found that house prices had risen last month for the first time since July 2018. However, Rics warned that worries about Brexit would continue to put a damper on price growth.

Jeremy Leaf, north London estate agent and a former Rics residential chairman, told the Financial Times: “Mortgage approvals for home purchase are always a useful lead indicator of future market activity and these are no exception.

“They confirm what we have been seeing on the ground and in other surveys — that transactions are holding up reasonably well despite political and economic distraction,” he added.

However, he noted that sales are taking longer to complete and that buyers and sellers are having a hard time finding middle grounds on prices. He attributed some of the market turbulence to the withdrawal of buy-to-let investors from the market, following the introduction of a stamp duty surcharge on second homes and cuts to the mortgage interest tax relief. Those buyers haven’t yet been replaced by fist-time buyers.

The market varied regionally as well, he noted.

“The picture is very patchy and can vary considerably between areas which are quite close together and between London and elsewhere.”

The United Kingdom was due to leave the European Union on 29 March, but was granted an extension until 31 October, after Prime Minister Theresa May failed to gain parliamentary approval for her withdrawal agreement.

With the new deadline looming, other analysts cautioned that the recovery in the housing market would be limited.

Capital Economics property economist Hansen Lu said: “Looking ahead, the delay to Brexit suggest that demand and sentiment in the housing market will stay subdued for at least the next few months. As a result, we don’t expect to see a further recovery in mortgage approvals this year. At the same time, a no-deal Brexit looks less likely than before.”

However, recovery in the housing market was matched by and related to other good economic indicators.

While consumers were still wary of big-ticket purchases, “it may well be that housing market activity has gained some support from recent improved consumer purchasing power and robust employment growth,” Howard Archer, from economic forecasting group EY ITEM, fold the Evening Standard.

Annual wage growth is at nearly a 10-year high and unemployment has fallen to 3.9%, a 44-year low.

Soruce: Money Expert

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Mortgage approvals up nearly 10%

The number of people being approved for a mortgage increased by nearly 10 per cent in March.

The latest data from UK Finance showed the number of approvals for home purchase were 9.3 per cent higher in March 2019 than the same month the year before.

Year-on-year, the number of people getting approved to remortgage increased by 11.1 per cent.

Gross mortgage lending across the residential market in March 2019 was £20bn – 0.5 per cent lower than the same month in 2018.

This fall was mainly seen in high street banks, where lending dropped by 3.5 per cent year-on-year.

Gareth Lewis, commercial director of property lender MT Finance, said the subdued lending in the first quarter came as no surprise due to the uncertainty surrounding Brexit.

He said: “There was never going to be a huge growth in lending in the first quarter. However, as far as the second quarter of the year and beyond is concerned, if the levels of activity we are seeing are anything to go by, the picture may be changing.

“With Brexit pushed back, far enough away for people to forget about it a little, and with fewer column inches in the papers, this is all a positive as it stops people from worrying about it too much.

“They are getting on with life, looking at opportunities to improve their portfolios – from an investment point of view, Brexit is getting less attention now, which has to be a good thing.”

Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “Mortgage approvals for home purchase are always a useful lead indicator of future market activity and these are no exception.

“They confirm what we have been seeing on the ground and in other surveys — that transactions are holding up reasonably well despite political and economic distractions as might be expected at this time of year.

“However, it is still tough to find common ground between even realistic buyers and sellers, and sales are certainly taking considerably longer, not least because as we are finding, buy-to-let investors have not been replaced completely by first-time buyers.

“The picture is very patchy and can vary considerably between areas which are quite close together and between London and elsewhere.”

By Imogen Tew

Source: FT Adviser

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Mortgage approvals made to home buyers jumps to nine-month high

THE number of mortgage approvals made to home buyers in the UK jumped to a nine-month high in March, figures from a trade association show.

There were 39,980 approvals for house purchase, marking the highest total since June 2018, according to UK Finance.

Meanwhile 29,448 re-mortgage loans got the green light in March – the highest figure since August 2018.

UK Finance said personal deposits grew by 0.4 per cent in the year to March, with savers’ money held in instant access accounts growing at a faster annual rate, of 2 per cent.

This reflects consumers’ preference to keep cash close at hand amid ongoing economic uncertainty, UK Finance said.

Howard Archer, chief economic adviser at EY ITEM Club said: “UK Finance reported mortgage approvals for house purchases somewhat surprisingly edged up to a nine-month high of 39,980 in March.

“The housing market has been constrained for an extended period by overall challenging conditions – relatively limited consumer purchasing power, despite recent improvement, after an extended squeeze and fragile consumer confidence.

“It should be noted that the overall national picture has been dragged down by the particularly poor performance in London and parts of the South East.”

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said looking ahead, mortgage lending is likely to continue to “flatline”.

“Mortgage rates look set to hold steady, keeping the proportion of home buyers’ incomes absorbed by loan payments at historically low levels,” he said.

“Nonetheless, households’ overall confidence still is low and surveys show a marked deterioration in households’ view that housing is a good investment, which only will have been strengthened by the recent slowdown in house price growth.

“It’s hard to see lending returning to 2013-to-15 levels any time soon.”

Jeremy Leaf, a north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors (Rics), said:

“It is still tough to find common ground between even realistic buyers and sellers, and sales are certainly taking considerably longer, not least because as we are finding, buy-to-let investors have not been replaced completely by first-time buyers.

“The picture is very patchy and can vary considerably between areas which are quite close together and between London and elsewhere.”

Andrew Montlake, director of mortgage broker, Coreco believes there has been a “marked improvement” in the property market in the past month or so.

“Something has changed, and this week in particular has seen a huge surge in mortgage inquiries,” he said.

“There’s always a surge in activity levels during the spring but this year it has been accentuated by the pent-up demand caused by Brexit.

“Those who aren’t buying are re-mortgaging in order to improve their homes, and many are picking up an even more competitive rate as they do so,” he added.

Source: Irish News

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UK mortgage approvals tumble to six-year low

Mortgage approvals have slumped to a near six-year low, industry data showed on Tuesday, as heightened Brexit uncertainty rattled the UK housing marking.

According to UK Finance, which represents high street banks and other lenders, 35,299 mortgages were approved in February on a seasonally-adjusted basis. That was down from January’s revised figure of 39,555, a 2.2% decline on February 2018 and the lowest since April 2013.

Gross mortgage lending across the residential market was £19.1bn, 2.5% higher than February 2018.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the sharp fall was “almost entirely due to the recent jump in Brexit uncertainty”.

He continued: “Surveys such as the RICS Residential Market Survey have pointed to a downturn in house buyer demand since November, so the prior resilience of approvals in January had been puzzling. According to RICS, new buyer enquiries fell in February at the fastest rate since May 2008, so we expect approvals to continue to fall over the coming months.”

However, Pantheon Macroeconomics argued that – provided the UK quits the European Union with a deal – the housing market should steady itself as the year progresses, with the UK Finance measure of approvals returning to between 40,000 and 50,000 in the second half.

Howard Archer, chief economic advisor to the E&Y ITEM Club, said February’s fall meant mortgage approvals are now “well below the 38,000-40,000 range that largely held through 2018”.

“February’s drop to a near six-year low adds to recent indications that heightened economist and Brexit uncertainties are weighing down on the housing market,” he added. “It is already under pressure from overall challenging conditions – still relatively limited consumer purchasing power after an extended squeeze, fragile consumer confidence and wariness over higher interest rates.

“With Brexit now likely to be delayed until 22 May at least, further uncertainty is likely to weigh on the housing market. This has caused us to trim our forecast for house price growth over 2019 to just 1%.”

UK Finance also said that unsecured consumer credit growth was 3.8% in February. That is the lowest level since October and only marginally ahead of July’s 3.7%, the weakest since October 2014.

Credit card spending was £9.7bn in February, 1.1% up on the same month in 2018. Personal loans were ahead 2.3% while overdrafts were 0.6% lower.

Archer said it appeared consumers were being “relatively cautious” in their borrowings, while lenders had become “warier” about advancing unsecured credit.

By Abigail Townsend

Source: ShareCast

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Mortgage approvals hit record highs in UK regions despite property market lull

Banking trade body UK Finance has unveiled lending data showing how well first-time buyers, home movers and those remortgaging fared during 2018 in the UK regions of London, Scotland, Wales and Northern Ireland.

Despite concerns about the property market stalling, the data shows some regions had record levels of approvals for first-time buyers and home movers.

Approvals for first-time buyers in Northern Ireland hit a 14-year high last year at 10,600, up 9.4% annually.

Similarly, approvals to first-time buyers in Wales hit their highest level for 12 years at 16,900, up 4.3%.

There were 42,800 new first-time buyer mortgages in London during 2018, 0.5% more than in 2017, but Scotland recorded a 3.1% annual drop to 34,100.

In the home mover market, Northern Ireland recorded the highest number of approvals since 2007 at 6,600, up 6.5% annually.

The number of home mover mortgages approved in Wales was at its highest level for 11 years at 15,800, a 0.6% annual increase.

However, home mover mortgage approvals fell by 5% annually in the capital to 28,800 and declined 0.9% in Scotland to 34,300 during 2018.

Meanwhile, all four regions had record levels of remortgaging approvals during 2018.

Remortgage approvals hit decade-highs in London and Wales.

There were 60,400 remortgages in the capital, a 6.2% annual increase, while Wales recorded 20,100, 12.3% more than in 2017.

There were 9,500 remortgages in Northern Ireland, up 11.8% year-on-year and remortgage approvals in Scotland hit a seven-year high at 35,400, up 11% on 2017.

Commenting on the figures, Jonathan Harris, director of mortgage broker Anderson Harris, said: “First-time buyer numbers across the country have risen on the back of cheap mortgage rates and Stamp Duty exemptions.

“The much-maligned Help to Buy scheme is also playing a large part in helping first-time buyers on to the housing ladder, while more lenders are offering high loan-to-value deals.

“In London, despite recent price falls, affordability remains an issue with the deposit the biggest barrier to home ownership.

“The Bank of Mum and Dad is being called upon more than ever before, but those who don’t have this resource are finding it very difficult.”

Source: Property Industry Eye