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National Mortgage Index September 2018

Consistent August market but regional differences remain

Brian Murphy, Head of Lending for Mortgage Advice Bureau comments:

"The Bank of England’s decision to raise the bank rate at the start of the month was well signposted, meaning that many lenders had already priced in a 25 basis point rise some months previous and as a result, the cost of borrowing following the announcement was mostly unaffected, leaving rates at still exceptionally competitive levels for many borrowers. Whilst this did stimulate enquiries regarding remortgages and product transfers, consumers didn’t appear to be unduly concerned and indeed, as rates are still at close to historic lows, many borrowers have, in most cases, been pleased by the opportunity to revisit their mortgage with a view to securing a new deal.

Activity in the purchase market continued to remain steady at a headline level in August; although in terms of prices, as in previous months this somewhat masks the ‘two tier’ market where London and the South East activity and pricing remained subdued, whilst the East and West Midlands, North West, Scotland and Wales all saw average property values increase on average, as well as healthy transaction levels, due to ongoing consumer confidence. At a headline level, both the Halifax and Nationwide indices reported modest increases in house price growth in August, suggesting annualised rises of 3.7 per cent and 2 per cent respectively. Also, the Royal Institution of Chartered Surveyors (RICS) noted in its latest Residential Market Survey that its members had observed “some parts of the UK posting stronger trends” and also that “robust price growth” was reported across Scotland and Northern Ireland in August.
In terms of borrowing metrics, there has been very little movement over the past month as far as key indicators are concerned, with LTVs, purchase loan amounts and income levels all remaining reasonably static for the First Time Buyer, Home Mover, Buy To Let and Remortgage sectors alike. As such, we would suggest that the market held a stable course over August.

In summary, although last month was peak holiday season, it seems that many buyers and sellers who were transacting were still very focused on taking advantage of the current borrowing climate. Therefore, despite the current economic and political headwinds, it’s very much been ‘business as usual’ with a steady and forward-moving momentum."

Read the full report here.

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