National Mortgage Index November 2018

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

"October saw a continuation of the diverging market that’s been in evidence for most of this year, with significant regional differences which have been becoming apparent for some time. For the most part, outside of London and some areas in the South East, activity was consistent on previous months, and we saw some conurbations experience upwards movement in terms of values due to low stock levels not supporting buyer demand.

"This has led to some interesting outcomes, as for example average property purchase prices in Wales, the North East and East of England increased last month, but the average purchase loan size decreased. This leads us to conclude that those existing home movers who are moving up the ladder in these areas are perhaps seeing a net gain in terms of the value of the property they are selling, meaning that they are benefitting from more equity to take into their next purchase, and therefore borrowing slightly less to fund the transaction.

"Consumer confidence in bricks and mortar appeared to remain positive for the most part last month, as headline transaction levels remained at a healthy level in October with some of our regions reporting near-record months in terms of the number of clients both seeking purchase mortgages and completing their transactions. Data from HMRC in terms of residential transactions in October supports our findings, with the overall volume of properties sold increasing month on month and year on year. This in spite of ongoing political and economic uncertainty during the month, leaving us to conclude that those who are currently moving home have adopted the mindset that the time is right for their individual circumstances, therefore they will continue with their plans regardless of what’s being reported in the news.

"Elsewhere, whilst there was a slight amount of movement on key metrics across other borrowing sectors – Residential Remortgage, First Time Buyers and Buy to Let – we didn’t see any significant changes to indicate the start of any particular trends at headline level. Unsurprisingly, fixed rate mortgages continued in their popularity with all client groups, supported by the fact that many lenders have taken a pragmatic view and held, or even reduced in some cases, their rates over the last few weeks in a bid to secure new business. Indeed, the currently benign lending climate is possibly assisting with the overall support of the market, given current political and economic headwinds."

To read the full report, click here.