One of the best indicators of the health or otherwise of the housing market in the UK has to be the mortgage market. If mortgage approvals are up, it must follow that more people are buying houses. In February, the mortgage market continued it’s positive start to the year with an increase of 3.8% in approvals compared to 12 months ago., according to a report into the mortgage market by e-surv.
Over 26% of loans went to small deposit buyers – typically these would be first time buyers. This is slightly lower than in the previous month where the percentage of small deposit buyers gaining mortgage approvals was 27.1%. As we reported in our previous blog post – Monthly UK House Price Statistics – February, the cost of borrowing continues to drop with many lenders cutting their rates and offering, competitive, longer term fixed rates which is also tempting buyers into the market. This has gone some way to counteracting the negative effect of political uncertainty arising from the seemingly indeterminable Brexit situation.
Approvals for large deposit borrowers also fell back from the previous month slightly to 26.9% of the market.
The number of mortgages being taken out by borrowers with large deposits fell to 26.9% of all loans, lower than the 28.1% recorded in the previous month and further back from the 30.1% seen in December.
It is the mid market borrowers who increased most in February, increasing from 44.8% to 46.8% of the mortgage market.
The report into the mortgage market, by e-surv shows it to be in pretty robust health – Richard Sexton, e-surv Director commented:
‘While confidence has fallen in the housing market due to economic and political turbulence, the mortgage market continues to grow. Existing home owners are able to lock into cheap fixed rate deals while first time buyers are being helped by more generous criteria being offered by banks and building societies,’ he pointed out
‘Raising a deposit remains a challenge for young borrowers, but there are more products being launched which are targeting those with little cash to spare,’ he added.
So, despite the current political uncertainty, there is plenty of room for optimism that the housing market, and the mortgage market, will continue to do well throughout the coming year.
Whether you are a first time buyer or a seasoned property purchaser, our mortgage services can help you to make sense of the current deals available and help you to make your next move.
Seddons have teamed up with the Mortgage Advice Bureau – one of the UK’s leading providers of expert, face-to-face, financial and mortgage advice on the high-street – to offer landlords, buyers and sellers the option of over 12,000 mortgages from 90+ lenders. For more information, or to make an appointment, contact our Mortgages Department.