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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

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UK mortgage approvals edge higher

The number of new mortgages approved by the main high street lenders nudged upwards in January, data published on Tuesday showed.

UK Finance, the trade body for the big banks and building societies, said that approvals for home purchase rose 1.5% year-on-year in January, while re-mortgage approvals were 3.1% lower, giving an overall rise of 0.3%.

The drop in re-mortgaging follows several months of strong growth as customers looked to lock in deals, with some doubt over what the Bank of England’s plan will be for rates amid the extra uncertainty of Brexit.

Gross mortgage lending was 1.5% lower, at £21.6bn.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “January’s data indicate that mortgage lending is holding up much better than surveys of house buyer demand have suggested.

“We’re reluctant to conclude, however, that housing market activity is on a sustainable recovery path. The new buyer enquiries balance of the RICS Residential Market Survey fell to its lowest level since June 2008 in January; the balance usually is a great guide to the lending data. The sharp downturn in lending in 2016 also demonstrates that Brexit uncertainty can be very damaging.

“Even a sluggish pace of rate hikes, following the resolution of Brexit uncertainty, will prevent mortgage approvals from recovering to pre-referendum norms over the next couple of years.”

UK Finance said that £10.8bn was spent on credit cards in January, a 4.4% hike on the same month a year earlier, with the outstanding level of credit card borrowing also growing by 4.4% in the 12 months to January. Personal borrowing through loans and overdrafts was ahead 4.7%.

Personal deposits grew by 0.4% in the year to January, which UK Finance said “suggests that the recent rise in real wages has not yet translated into higher levels of savings”.

Source: ShareCast

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UK consumer lending growth slows to new three-year low, mortgage approvals jump

Lending to British consumers slowed again last month to its weakest rate in more than three years, but there was a pick-up in the housing market with a jump in mortgage approvals, Bank of England data showed on Thursday.

The BoE figures showed the annual growth rate in unsecured consumer lending fell to 7.5 percent in October, its weakest since May 2015 from 7.9 percent in September, when there was a sharp drop in new car purchases.

Other economic data in recent months have mostly shown slower consumer demand since an unexpectedly robust summer, as shoppers rein in purchases and express concern about how leaving the European Union in March next year will affect them.

However, the BoE said the number of mortgages approved for house purchase rose to 67,086 in October from 65,726 in September, the highest number since January and above all forecasts by economists in a Reuters poll.

The housing market has slowed for most of this year, with major mortgage lenders reporting price growth slowing to a five-year low.

Net mortgage lending, which tends to lag behind approvals, also beat all forecasts at 4.121 billion pounds last month, up from 4.015 billion the month before, the BoE said.

On Monday industry body UK Finance reported the number of approvals for house purchase picked up to a four-month high in October, though they were still slightly down on a year earlier.

British house price growth has slowed this year, mostly due to falling prices in much of central London, where demand has been hit by higher purchase taxes on expensive homes and reduced foreign investor appetite since 2016’s Brexit vote.

Wednesday saw BoE Governor Mark Carney warn that in the unlikely – though growing – possibility of a “disorderly” departure from the EU in March next year, house prices could fall 30 percent as part of broader economic dislocation.

The central bank also said demand for consumer lending had been subdued by Brexit uncertainty, but could ramp up again once the prospects for Brexit were clearer.

Figures for October alone showed a 0.894 billion pound increase in unsecured lending, slightly below economists’ forecasts of a 1.0 billion pound rise.

Source: UK Reuters

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Buyers and banks ignoring Brexit concerns as mortgage lending hits highest level since January

Mortgage approvals for house purchase have hit their highest levels since January.

Banks approved 67,086 home loans in October, up 2% on a monthly basis, according to Bank of England data on mortgage lending.

Remortgage approvals, which had previously dominated the market, were flat at 49,339.

It backs up estimates by banking trade body UK Finance earlier this week that mortgage lending for house purchase had hit a three-month high.

Commenting on the data, Kevin Roberts, director at the Legal and General Mortgage Club, said: “There’s no doubt that Brexit and the ongoing political uncertainty has made some buyers and potential sellers act with caution, despite the current low interest rate environment.

“However, with its growing choice and flexibility, the mortgage market continues to entice borrowers looking for competitive deals.”

Source: Property Industry Eye

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House purchase mortgage approvals hit a three-month high

Home buyers have received some long-awaited good news as mortgage approvals for house purchase increased for the first time in three months, banks claim – but are they being driven by the return of 100% deposit “supersized mortgages?”

Lending data from trade body UK Finance shows mortgage approvals for house purchase were up 3.6% annually and 21.2% on a monthly basis to 45,289 during October.

Lending to home buyers had been falling since July 2018 and hit a six-month low in September.

The boost seems to have come at the expense of remortgaging, with approvals in this area down 13.5% year-on-year to 33,505.

The value of gross mortgage lending across the market in October was up 5.6% to £25.5bn.

It comes amid reports of the return of controversial “supersized mortgages,” which require little or no deposit and were seen as a cause of the 2008 financial crisis.

Comparison website Moneyfacts lists 16 different 100% loan-to-value mortgages that don’t require any deposit but do need a guarantor, which is usually a family member or a charge placed on another property or someone’s savings.

Bank of England data shows that a quarter of mortgages are now for 4.5 times someone’s salary or higher, compared with a fifth just three years ago.

Debt charities and mortgage brokers have warned it is important that borrowers aren’t stretched too far.

However, UK Finance doesn’t seem concerned.

A spokesman told the Daily Mail: “High loan-to-income mortgages are only likely to be available to those who have good prospects for wage increases, such as those in certain professional roles.

“Before they are able to offer any mortgage, lenders must undertake a strict affordability assessment in accordance with the rules outlined by the regulator.”

Source: Property Industry Eye

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Mortgage approvals stall in September

Mortgage approvals slumped in September and gross lending steadied in what marked a turn of events following the strong remortgaging activity seen in the months to August.

In its latest household finance update trade body UK Finance reported gross lending in the residential market had dropped to £21.5bn in September, 1.2 per cent lower than the £21.8bn seen in the same month the year before, with £13.1bn being arranged by high street banks.

The number of mortgage approvals by the main banks was also down 9.1 per cent on last September’s figures, with house purchase approvals down 10.1 per cent from 41,529 to 37,352.

In the month before, August, falling house purchase approvals had been offset by strong remortgaging activity, but approvals in the remortgage market were also down in September.

Year on year they have fallen 7.4 per cent, from 29,899 last September to 27,676 now. Compared with August, the month the interest base rate was raised to 0.75 per cent, figures were down 14.7 per cent.

Eric Leenders, managing director of personal finance at UK Finance, said: “The mortgage market softened slightly in September, following strong remortgaging activity in the months preceding the recent base rate rise.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, said the softening of the mortgage market in September had come as no surprise as Brexit uncertainty was causing a number of borrowers to defer making decisions.

He said: “As soon as we have a definite deal, whatever that may look like, we expect to see a bounce as people finally make the decisions they have been deferring.”

John Goodall, chief executive at buy-to-let specialist Landbay, said the slow down in mortgage lending suggested a wider deceleration in the market.

Mr Goodall said regulatory changes, “extortionate” stamp duty, and Brexit had all contributed to a slump in the mortgage market.

He said: “Landlords have historically found themselves targets of the budget, so all eyes are on next week’s announcement.

“It is clear that now is not the time for the Chancellor to make changes or he runs the risk of further damaging the private rental sector. The only sweetener would be a reduction or removal of stamp duty, which would provide a much needed boost for the market.”

Source: FT Adviser

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Home purchase mortgage approvals plunge almost 10% on a year ago

Mortgage approvals for home purchase hit a six-month low in September, data from the main high street banks shows.

Figures from trade body UK Finance showed there were 37,352 mortgage approvals for house purchase last month, down 9.4% annually and the lowest figure since March 2018.

It is also the third consecutive month that approvals have dropped.

Lenders also approved fewer remortgages, down 7.4% annually to 27,676.

Commenting on the figures, Paul Hunt, managing director of financial technology firm Phoebus Software, said: “We are beginning to see something of a trend with the market waning in the past few months.

“However, recent reports show first-time buyer activity at a 14-month high and there are also growing signs that there is still a good amount of appetite with some estate agents reporting an increase in the number of properties coming to market.

“Nevertheless, to say we are heading into choppy waters is probably an understatement as the politics surrounding Brexit negotiations continue to cast doubt in people’s minds.

“However, with mortgage lenders having quotas to fill and targets to hit, we could see a raft of deals coming to market to tempt. As consumers turn to credit cards to fund their spending, the question will be whether, as we head towards Christmas, people choose property or the path of least resistance.”

Meanwhile, data from Mortgages for Business, based on its third quarter activity, has suggested buy-to-let mortgages for houses in multiple occupation (HMOs) have become the most popular form of borrowing by landlords.

The broker found that 32% of completed purchase transactions were for HMO buy-to-let loans, up from 32% in the second quarter.

Meanwhile, the proportion of standard buy-to-let purchase loans fell from 35% to 33% over the same period.

The broker also found that the proportion of buy-to-let transactions completed by limited companies increased from 42% to 44% between the second and third quarter.

However, their share of the value of lending fell from 44% to 43%.

Looking ahead, there was a drop in the proportion of applications submitted by landlords using a corporate structure from 48% in the second quarter to 44% in the third.

Source: Property Industry Eye

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Mortgage approvals fall to six-month low in September as experts warn of ‘fragile’ housing market

Mortgage approvals fell to their lowest value in half a year in September, according to the latest data from UK Finance, meaning every month of 2018 so far has dropped against 2017 approval numbers.

Lending amounted to £21.5bn for the month, the lowest since the £20.6bn recorded in April and a drop of 1.2 per cent on the same period in 2017.

High street banks’ mortgage approvals fell by 9.1 per cent year on year.

New house purchases fell 10.1 per cent and remortgages dropped 7.4 per cent, the data showed.

Eric Leenders, managing director of personal finance for UK Finance, said: “The mortgage market softened slightly in September, following strong remortgaging activity in the months preceding the recent base rate rise.

“The overall economic backdrop remains strong, with inflation falling back, a lower chance of further interest rate rises and high levels of employment, and we do not expect to see a more significant downturn in the housing market unless the wider economy starts to falter,” said Yopa chief property analyst Mike Scott.

Jeremy Leaf, north London estate agent and a former Rics residential chairman, added: “These figures reflect what we are seeing on the ground – we are still in a needs-driven, fragile market even though listings and demand are improving.

“Cautious buyers, as well as lack of competition especially for smaller stock, means transactions are taking much longer.

“We are hoping that Budget measures don’t knock the market completely off course and help to improve accessibility for first-time buyers in particular, as they are the lifeblood of the market.”

Howard Archer, chief economic advisor at EY Item Club, warned that the low approvals rate would impact house price growth, estimating a growth rate of around 2.5 per cent for 2018 and again in 2019.

“Caution over making house purchases may well be magnified by current heightened uncertainties over Brexit,” he added.

“Potential house buyers may also be concerned that they are likely to further interest rate hikes over the medium term following August’s hike.”

UK Finance also found that personal borrowing through loans and overdrafts grew by 2.3 per cent in the year to September, as credit card spending hit £10bn last month – 3.4 per cent higher than last September.

Outstanding levels of credit card borrowing also grew by 5.7 per cent over the past 12 months.​

Leenders said: “There has been modest year-on-year growth in card spending. However, borrowing through personal loans and overdrafts has contracted slightly in recent months, suggesting demand for unsecured household finance is becoming more subdued.

“Consumers are increasingly choosing to keep cash close to hand, with deposits held in instant access accounts showing steady growth.”​

Source: City A.M.