Market remained healthy in March
Latest data from Mortgage Advice Bureau, the UK’s leading mortgage broker¹, suggests that the UK housing market has seen a moderate level of house price growth in many areas in the first quarter of 2017, whilst other key indicators remain either unchanged or similar to the
previous month, including:
- Marginal change in average purchase price across the UK (less than 0.5%)
- Minimal change in average size of remortgage loan (1.5% change)
- Applicant age and income levels remaining broadly unchanged across key groups (residential purchase, residential remortgage, first time buyers and Buy-To-Let landlords)
Brian Murphy, Head of Lending for Mortgage Advice Bureau comments, “Overall activity levels so far in 2017 have been healthy, with recent data from the CML suggesting that borrowers took out more loans to purchase a home in the first two months of 2017 than any year since 2007, which is a solid reflection of ongoing consumer confidence in bricks and mortar. However, the market is still in evolutionary mode, and has created an equilibrium which indicates a much calmer picture, rather than a ‘Spring spike’ in Q1 activity which may have created a more volatile outlook.
It would seem that the market has found a ‘new normal’ and has made a natural adjustment following the government’s intervention in terms of taxation on landlords and Buy-To-Let lending legislation from the PRA. These two factors combined would seem to have had an effect on the market, by freeing up stock at entry level. Clearly this was the intention of the measures which were introduced last year, and evidence of this is beginning to filter into the market now with first time buyers picking up the slack in many areas of the UK where Buy-To-Let purchase transaction numbers have fallen.
With the exception of the East of England, where house prices have seen significant levels of annual growth, and London, which as ever continues to operate under its own microcosm, the majority of the UK is currently experiencing a gentle rate of annual growth, as has been as reported by various industry bodies in the past few months.
It’s possible to suggest then that perhaps the market has found a level which could form the basis of a steady market over the coming months, unless consumer sentiment changes significantly as a result of the upcoming election, which we believe is unlikely. This in itself is perhaps not a negative situation, as a calm and steady picture overall would benefit many, particularly given current political and economic factors.”
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