National Mortgage Index December 2018
Brian Murphy, Head of Lending for Mortgage Advice Bureau comments:
"Overall activity in November was very much in line with expectations for the time of year, in spite of ongoing political and economic uncertainty due to Brexit negotiations, with a steady number of purchase transactions, together with significant levels of remortgage and product transfer business. Many of our key indicators across the four main sectors – First Time Buyer, Residential Purchase, Remortgage and Buy To Let – remained consistent on October and indeed, the months prior to that, highlighting that the market has enjoyed a degree of stability for much of this year.
However, in terms of regional market conditions, the picture for November was far more complex, with a series of ‘micro markets’ highlighting the ongoing divergence between the better performing areas and those which continued to experience less buoyant circumstances. As we saw last month, a picture is emerging in areas such as Yorkshire and the Humber, the East Midlands and Scotland where average purchase prices are increasing, yet the average purchase loan size doesn’t appear to be rising at the same rate or, conversely, has dropped. This leads us to conclude in these conurbations where vendors are perhaps seeing an increase in the value of their property, they are able to take more capital into their next purchase meaning that they possibly don’t need to borrow as much to move home. Certainly, on the ground in these areas our brokers are reporting that business in November was brisk, again supporting the picture from last month that certain regions are operating in very different gears to others.
It was interesting to observe that a number of lenders over the last month have been releasing ever-more competitive rates, with products which were very keenly priced. This shift has provided borrowers with a far wider range of good value options than we’ve seen for some time, particularly for those who have been looking for a five-year fixed rate deal, where the current crop of products are now nearly as low as two-year fixed rates, which had previously been considered market-leading. In particular, some lenders have recently released highly competitive Buy to Let fixed rate products, which have proven popular with investors who have either been refinancing or adding to their portfolios.
Another area that has benefited from increased market competition is the 95% LTV space, where additional entrants to the sector have created downwards pressure on prices as they seek to gain ground on mainstream lending brands. This has led to more First Time Buyers being able to access borrowing as rates have fallen significantly since the first few months of 2018, and therefore have aided affordability. As more lenders have recently launched products targeted at low deposit customers, with further also set to follow suit in the coming months, one might suggest this can only mean a positive result for the consumer."
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