Buyers still moving, despite seasonal factors
Brian Murphy, head of lending for Mortgage Advice Bureau comments:
“July was dominated by political headlines due to the appointment of Boris Johnson as the new Prime Minister, together with the announcement of his new Cabinet. In normal circumstances, any change of occupant at ‘number 10’ generally brings about a temporary pause in market activity as consumer sentiment settles. Whilst the usual seasonal factors applied, with some would-be movers distracted by holiday plans, certain regions, such as Scotland, Wales, West Midlands and East Anglia continued to perform well last month, with little discernible impact on their local housing markets. Overall house price growth, whilst muted at headline level, remained in positive territory on an annualised basis. In fact, a number of our brokers recorded one of their busiest months so far this year, with some citing an increase in the number of mid-market family movers, which is encouraging news.
“This is particularly relevant as there were concerns amongst some in the industry that the suggestion of possible Stamp Duty reform could have encouraged potential buyers to ‘wait and see’ until the Autumn Budget, when any such measures would ordinarily be announced. However, broadly speaking this doesn’t appear to have been the case; the divergence between the better performing regions remains apparent in terms of both transaction volumes and increases in values, but this is possibly more due to a continuation of the varying degrees of consumer confidence across the UK based on local economic factors than anything else.
“Remortgage cases also appeared to be on the increase in July, and this is likely to continue as we move into the second half of this year when many clients on existing two-year fixed rates see their current products coming to an end. With several lenders repricing longer fixed rate products downwards during the month, some clients are now reviewing their borrowing arrangements to take advantage of lower rates in order to either reduce their monthly payments, or indeed the overall term of their mortgage. For those who are purchasing at the moment, the current crop of rates available offers excellent value, as well as further support for affordability calculations. This is a continuation of the competitive market we’ve seen for some time now, and further highlights the opportunity borrowers have at the moment to secure a low product rate for an extended period.
“In terms of key indicators for the main borrowing groups, these all remained relatively steady in July, again potentially reflecting the current set of wider economic sound fundamentals in terms of average wage growth, low costs of borrowing and ongoing demand for properties.”
To read the full NMI report, click here.
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