Marketing 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

Marketing No Comments

Home purchase mortgage approvals up but remortgaging is down

Gross mortgage lending dropped slightly in May 2019 by 0.4% to £21.9 billion, compared with the same month in 2018, new figures from UK Finance show.

Two thirds of this lending (£14 billion) is by the high street banks and this is 3.5% higher than May 2018.

The number of mortgages for home purchase approved by the main high street banks in May 2019 was 49,683, a rise of 9.1 per cent year-on-year, and the highest level since June 2016.

Approvals for other secured borrowing at high street banks rose by 5.9 per to 9,712 but remortgage approvals fell by 3.7 to 30,579 over the year.

The £11.3 billion of credit card spending in May 2019 was 5.6 per cent higher than the same month in 2018. Repayments have remained in line with credit card spending, showing that consumers are managing their finances effectively overall, says UK Finance.

Personal borrowing through loans from high street banks in May stood at £1.7 billion, which is 9.3 per cent higher than the same month in 2018.

Lending through bank overdrafts was 3.2 per cent lower at £6.3 billion compared to May 2018.

Deposits held in the high street banks’ personal accounts and savings accounts were 1.2% higher year-on-year at £854.3 billion.

Richard Pike, Phoebus Software sales and marketing director, said: “Looking at these latest figures from UK Finance, and the upwards swing in the number of mortgage approvals for house purchase, it appears the market is moving again despite the ongoing political turmoil in the UK.

“The increase in credit card spending is something that we do need to be mindful of, but currently we can also see that consumers are so far keeping up with repayments of their debt.

“One wonders whether credit cards are being used to keep up repayments on other areas as well? We must not only consider levels of debt but future affordability if credit card spending keeps increasing”.

By Joanne Atkin

Source: Mortgage Finance Gazette