You are here: Home - News -

Housing ‘bubble alert’ issued by mortgage adviser for 19 UK towns and cities

by: Tim Chen
  • 12/10/2017
  • 0
Housing ‘bubble alert’ issued by mortgage adviser for 19 UK towns and cities
Mortgage broker One 77 Mortgages has issued a “bubble alert” on 19 mainly northern UK towns and cities, where house prices are rising but mortgage lending is falling.

The research confirmed the “gap” is a measure of affordability by comparing the percentage difference between annual drop in lending against annual house price changes.

With this metric, Cleveland was most at risk, with property values rising 11% between Mar 2016 and Mar 2017, while lending fell 0.9%. Following Cleveland was Blackburn, with a gap of 6.8%, and Blackpool, at 6.2%.

The largest fall in lending was in Darlington and Sunderland, where borrowing fell 1.4%, or by £46m and £27.5 million respectively.

Of the 19 towns and cities highlighted in the research, only four were in the South, despite London being “traditionally seen as a bellwether for house price growth nationally” — suggesting that the Northern markets have “already caught a cold.”

“Shrinking mortgage lending sticks out like a sore thumb when you have continued annual house price growth,” said Alastair McKee, managing director of One 77 Mortgages.

Indeed, according to a Royal Institute of Chartered Surveyors (RICS) report out today, the number of new buyers and sellers in the property market continued to fall in September — to the lowest level since the Brexit vote.

The falling lending rates come despite near-record low interest rates, and One 77 Mortgages said that “the shrinking risk appetite in all these areas could be a result of high valuations and stricter lending criteria impacting how much buyers are able to raise to fund their purchases.”

If the Bank of England were to raise interest rates, these property markets would be at particular risk from changing lending conditions.

McKee added: “Buyers have to be careful that, with interest rates still temptingly low, they don’t jump in with both feet by borrowing too much in a local market that is possibly braced for a fall.”

There are 0 Comment(s)

You may also be interested in

Business Skills

In this section, we offer short ‘how to’ guides on harder to crack areas of business. From social media, to regulation or niche product areas, we cover it all.


Our journalists interview key industry entrepreneurs, strategists and commentators for day-to-day market insight and a strategic view of where the industry is heading. We offer lessons for success and explore the opportunities for your business

Success in Practice

Here, we share case studies fleshing out best practice to help you decide what could work for your business. Take a look at how others approached complex tasks like launching a new mortgage lender, advising on a new product area or deciding to specialise in another. Learn from others mistakes and triumphs.


Each week, we ask top mortgage and property commentators with a unique perspective to examine a key news headline, market move or regulatory or political issue.


Vote in our weekly poll here. It’s your chance to tell us what you think and be heard on the top news stories of the week. Review our archive to find out what your industry really thinks and all our coverage of the results.

Top Comments

Be part of the conversation on Mortgage Solutions. We want to hear from you. We have a tool called Disqus to tell us which stories get the most comments each week. Every Friday, the team picks the most thoughtful or opinionated contributions from our readers to enjoy again. Don’t forget to share your favourite stories from the site on social media to keep the conversation going.
  • RT @robjupp: Great day yesterday for donations to @MortSleepOut. With Gift Aid, we are now close to £17,000. It would be great to get to £2…

Read previous post:
Offices and hotels key commercial targets as investment falls sharply

Offices and hotels will provide the greatest opportunity for commercial finance investment in the next year, according to a survey...