For those keeping a close watch on the property market following the UK’s decision to leave the European Union in June this year, September’s mortgage approval figures show a welcome change.
While there are still many concerns for the UK’s economy due to the uncertainties surrounding Brexit, Bank of England figures show that the number of mortgages approved for purchases achieved a three-month high in September. A total of 62,932 mortgage loans (worth £11.1bn) were approved, which was up from August's 60,984 loan approvals.
Discussing September's figures, UK economist at Capital Economics, Scott Bowman said the figures imply that “the housing market is stabilising and appetite for debt hasn’t taken much of a hit following the Brexit vote”.
Following the Bank of England's decision to cut interest rates to 0.25% in August, mortgage rates have dropped to a new record low. Despite estate agents across the country reporting sluggish sales in the weeks following the EU referendum, figures are also showing a surge in the remortgage market.
September figures of remortgaging approvals rose to 42,440 where it seemed that borrowers were locking into deals and making the most of the low interest rates. This was above the previous six months' average of 41,882.
The positive reports from the Bank of England have been an indication that the property market is picking up, and that now is a good time to apply for both mortgage and remortgage loans.
Talking about the latest Bank of England figures, former residential chairman of RICS and London estate agent, Jeremy Leaf said: “The figures show a welcome bounce back in lending from the very disappointing figures the previous month.
“While bearing in mind that these numbers are a little historical, they reiterate what we are seeing on the ground that following an initial pause buyers are getting back to business, albeit a bit more cautiously.”
The Bank of England's data also revealed a drop in new unsecured borrowing – in particular, a value decrease in personal loans and overdrafts. Chief UK economist at IHS Global Insight, Howard Archer, believes that this correlates with a downturn in retail sales during September.
“It could be that consumers became a bit more cautious over borrowing in September or it could just be that they took a bit of a breather after largely spending at a rapid rate over the summer,” Archer said.
“The fundamentals for consumers remained largely healthy during the third quarter, with employment at a record high and purchasing power benefiting from earnings growth still running well above consumer price inflation.
“However, the positive fundamentals for consumers are now starting to be diluted – particularly by rising inflation – and this seems set to become a developing trend over the coming months.”
At Weale and Hitchen, our friendly team of property experts are happy to discuss your requirements and can offer the best advice on whether now is the right time for you to make a purchase. Contact us today or visit one of our five branches in either Bury, Holcombe Brook, Ramsbottom, Harwood or Rawtenstall.
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