Mortgage approvals increase as buyers ‘rush to beat Brexit’

The number of mortgage approvals rose last month, prompting claims of a pre-Brexit rush to purchase a property.

Data from banking trade body UK Finance showed there were 26,145 mortgage approvals for house purchase in December, up 5.2% annually.

Despite this, a slump in the number of remortgage advances meant the approvals figure across the mortgage market was at a four-year low of 52,432 at the end of the year.

Meanwhile, the UK Finance figures showed gross mortgage lending – based on the total value of new lending in December – was £21.1bn in the final month of 2018, up 4.7% annually.

This took gross mortgage lending across the residential market during 2018 to £267.5bn, 3.8% higher year-on-year.

Commenting on the figures, Richard Pike, sales and marketing director for Phoebus Software, said: “It is hard to talk about anything at the moment without mentioning the ‘Brexit’ word: it is all-consuming and there is little doubt that it continues to affect the housing market.

“The fact that house purchase approvals were up in December suggests that people are planning ahead and making their move before the March deadline.

“Interestingly the number of remortgage approvals took a dip compared to the same month in 2017, which bucks the trend throughout the rest of the year.

“Nonetheless, I would expect it to be the remortgage sector that will be keeping the mortgage market going in the coming months, as we wait to see how our exit from the EU pans out.

Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “These figures show that sales are still happening, where buyers and sellers are taking a longer-term view, prompted perhaps by the need to live near schools, work, or downsize.

“Negotiations can be tough but more successful when the parties concentrate on the difference between the buying and selling price – not the headline figure.

“Transactions and mortgage approvals/advances have proved to be a better indicator of future property market health for us than more volatile prices which vary considerably area by area and are often influenced by local as well as national factors.

“In the past few weeks we have noticed supply shortages, improving affordability and very low unemployment, and mortgage rates are proving more relevant to buyers and sellers than political uncertainty, so believe a sharp market correction is unlikely.

“However, perceived risk must be reflected in asking price discounts if terms are to be agreed.”

x

Email the story to a friend

2 Comments

  1. Property Poke In The Eye

    At the right price the market will keep moving.

    Keep focused.

    Report
  2. FlyingSheep54

    Why is it a rush to beat Brexit? If Project Fear is to be believed, house prices are gonna crash. So in that case why would people be rushing to complete on a house that is going to be worth considerably less in a few months time?

    Have you not considered that people simply like to get their house move done in time for Christmas?

     

    Report
X

You must be logged in to report this comment!

Leave a Reply

Thank you for signing up to our newsletter, we have sent you an email asking you to confirm your subscription. Additionally if you would like to create a free EYE account which allows you to comment on news stories and manage your email subscriptions please enter a password below.