Although we have seen a slight decline in house price growth over the last month or so, it does not mean that the market is not reasonably buoyant for this time of year, nor that buyers have decided not to buy.
According to the Council for Mortgage Lenders over 30,000 first-time buyers took out mortgages during July worth £4.6bn. This is the highest number since before the credit crisis hit, and a 25% leap on the same month last year. Buyers are having to take on larger loans with the average size of a first-time buyer loan in July reaching an all-time high of £127,500, up from £123,750 in June.
Banks and building societies are starting to get to grips with the mortgage market review provisions and are showing a greater willingness to offer home loans to new buyers. The government’s Help to Buy scheme has helped those with lower deposits. First-time buyers are now typically required to put down a 16% deposit, compared with a 19% deposit in July last year. Lenders are however still taking longer to issue mortgage offers with figures suggesting a house sale is typically taking a month longer to go through.
There is evidence to suggest some momentum has been lost in August compared to the rest of the year, although you have to take into account that the World Cup was in June and July and every man and his dog held off going on holiday until the end of July and throughout August. I expect house prices to remain on an upward trend but at a much slower, more restrained pace than earlier in the year. We have an economic environment that is supported by elevated consumer confidence, markedly rising employment, and still low mortgage interest rates.
The Council for Mortgage Lenders figures also suggest that the buy-to-let boom shows no sign of abating. There were 17,500 loans to landlords in July, up 12% on June’s figure, an 18% increase by volume and 26% by value on this time last year.
The number of existing homeowners remortgaging was up 19% in July compared to a year before as households switched to fixed rate deals ahead of potential interest rate rises.
The number of buyer enquiries has shot up significantly so far in September so it is a good time to get your house on the market.
- 15 September 2014