It might be easy to think that all financial news these days will be bad, so it’s nice to hear a bit of good news, and for the housing market, there is little better than something positive about mortgage approvals. And the good news is that the latest statistics show that approvals are on their way up, and this means that the whole property market can start to unfreeze a bit.
In its latest money and credit report released in October, the Bank of England reported the number of mortgages approved for house purchase had increased by 2 per cent to 66,440 in August at a value of £12.5bn. This means approvals were up £200m on the figure reported in July, which is a major boost to the market. And remortgage approvals saw even bigger growth, increasing from 44,795 in July to 53,125 in August, with values jumping from £8bn to £9.3bn.
Much of the growth is due to an increased level of confidence both in the market and amongst lenders, but is bolstered by the number of diverse products on the market, meaning that far from being a one size fits all, lenders are able to match borrowers to the best deal for their situation, making it easier to lend money and help the borrower get the property they want with a reduced risk to both parties.
The continued rise in property prices, which is now gripping much of the UK rather than just the South East corner, doesn’t seem to deter buyers either. While much of the country is feeling the benefits, the greater proportion of large deposit – being around 60% of the total cost of the property – lending is currently highest in Northern Ireland. By comparison, the lowest large deposit lending growth was in Yorkshire and the North West, where sales have been languished compared to the rest of the country. Growth in London and the South East has been most notable amongst borrowers with small deposits.
Interest rate rises actually seem to have a positive impact on the market as existing borrowers look to swap deals to secure rates and new borrowers rush to get on the ladder in a reasonably uncertain market. While this might smack of panic, it reflects people being cautious but optimistic and simply seeking to reinforce their position. Many commentators are predicting that activity on the market will remain buoyant for some months to come, with even the unknowns surrounding Brexit unlikely to dent confidence.
With around 5,000 mortgage products on the market, borrowers may not be aware of which ones will best suit their individual needs and if you are considering either a mortgage or remortgage, you certainly need to speak to an adviser who will be able to fit you to a product. Mortgage experts are perfectly placed to provide guidance throughout the home-buying journey by matching their clients’ needs with the right solutions and offering a range of possibilities. If you are searching for the right mortgage solution, contact Grange Mortgages for an impartial look at which ones fit your circumstances.