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Despite ‘potentially disruptive factors’, property market ‘steady’ – MAB

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  • 20/12/2017
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Despite ‘potentially disruptive factors’, property market ‘steady’ – MAB
After a tumultuous year of regulatory change and economic uncertainty, property prices largely held firm but showed limited growth, while the buy-to-let (BTL) market recorded annualised falls, according to Mortgage Advice Bureau (MAB).

Nevertheless, the MAB said 2017 showed a “resilient” property market, and expects a stable start to the New Year.

However, the average BTL purchase loan size fell 4.45% from £136,535 in 2016 to £130,449 in November 2017.

The average BTL purchase price also fell from £200,540 in 2016 to £192,464 this November.

Moreover, 8.6% more BTL borrowers are fixing their mortgages year-on-year. In November 2017, 98% of borrowers fixed their loans, against the 89.4% in 2016.

 

Residential purchase

The average loan size for residential purchases grew by 0.6% in 2017, from a typical loan of £171,834 in 2016 to £172,919 this year.

Average purchase price also increased by an annualised 0.6%, from £246,807 in November 2016 to £248,202 in November 2017.

Meanwhile, residential purchase borrowers who fixed their loans stayed broadly similar year-on-year, with 93.7% of borrowers fixing their mortgages in 2017, against 94% in 2016.

 

Residential Remortgage

Average remortgage loan sizes increased by 1.5% year-on-year, from £171,794 in November 2016 to £174,402 in November 2017.

While the average remortgage property value increased by an annualised 1.8% from £310,660 in 2016 to £316,215 this year.

The number of fixed rate remortgagers increased by 6.2%, with 96% of borrowers fixing their mortgages this year, compared to 90.4% in 2016.

 

The big picture

The start of November saw the first Base Rate rise in almost a decade, while the Autumn Budget, delivered later in the month, saw a windfall for first-time buyers (FTBs) with an exemption on stamp duty and land tax.

However, MAB said that it’s still too early to tell if the stamp duty changes will make any significant impact, or if the potential savings will be lost to properties coming to market at a premium owing to rising demand – as predicted by the Office for Budget Responsibility.

MAB also said that consumer confidence remains undimmed by the 0.25% Base Rate rise, as most areas saw a small increase in prices despite the expected cool-down over the holiday period.

Brian Murphy, head of lending at MAB said: “What is safe to say is that, in a year where we saw many potentially disruptive factors such as Article 50 being triggered, coupled with an ongoing economic backdrop which at best could have been described as cautious – instead of bringing the UK property market to its knees, it’s remained consistent and reasonably steady in real terms,” said Murphy.

“Which will provide us with a stable start to 2018,” he added.

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