March sees a robust end to first quarter of 2018
March saw the market steady overall, although on the residential purchase side the adverse weather affected many estate agents with prospective buyers cancelling viewings. This together with the Easter Bank Holiday meant that whilst some regions were slightly slower activity-wise than the preceding month, consumer confidence with regards to property remained consistent in many regions of the UK.
Transaction levels in March remained consistent on the previous month, according to data from HMRC, although of course these completions would have been the result of offers accepted both pre-Christmas and, in some cases early January. However, the overall level of completions does correspond with our data which suggests that sales volumes are steady.
House price growth is still in positive territory at headline level, with both the Halifax and Nationwide reporting 2.7% and 2.1% respectively, well within market expectations for this year. However, we are continuing to see a wide range of regional variation, with the RICS Residential Survey in March suggesting that regions such as Northern Ireland, Wales and the East Midlands all saw significant price increases, whilst prices cooled further in many London Boroughs. This chimes with MAB data suggesting that purchase loan amounts for residential mortgages last month showed decreases on an annualised basis in Greater London, yet rose significantly in areas such as the West Midlands, North West and South West, consistent with areas where property purchase prices are fluctuating.
The news headlines around a potential interest rate increase continued apace in March, meaning that across the board, both those borrowing to fund a purchase or those remortgaging their home overwhelmingly opted for a fixed rate product. Our figures suggest that 97.6% of those borrowing to fund a home move and 96.1% of those remortgaging their home in March chose to fix their rate, correlating with the raft of competitively priced two, five and even ten year deals available.
Following an initial surge at entry level last year when the Government introduced the current SDLT exemption scheme for First Time Buyers, it seems this particular market sector steadied in March, with all our key metrics for First Time Buyers remaining consistent on the previous month, including the typical size of First Time Buyer purchase loan, income, age and purchase price.
Typical LTV’s across all sectors remained broadly unchanged on the previous month, meaning that deposits on purchases and capital utilised to remortgage didn’t appear to increase to facilitate borrowing, even allowing for areas where prices have seen significant increases of late.
Overall then, it would appear that March and indeed the first quarter of 2018 point to a resilient market. One would suggest that we’re going into the second quarter of the year against a backdrop of potential interest rate increases and an ongoing lack of stock in some areas, and this may offer a degree of counterbalance to ensure that in regions where supply is short, we don’t see prices increase much in the near future.
Read the full National Mortgage Index Report here.
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