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MAB: ‘The data points to a settled market’ – Brian Murphy

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  • 30/08/2018
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Overall national data suggests the mortgage and housing markets are stable and holding steady with many key metrics unchanged since last year.

Buy to let is the only softer sector, according to Mortgage Advice Bureau’s national July figures, as the market continues to absorb the tax relief changes for landlords. However, first-time buyer, remortgage and residential purchases are all reportedly stable overall, despite a patchwork of house price growth across the country, the broker said.

“There is a perceptible softening in London and the South East, which was still apparent in July. Other regions, such as Scotland, Wales, the North and Midlands continue to see growth in key conurbations, which as previously reported has been the market dynamic for the past few months,” said Brian Murphy, head of lending at Mortgage Advice Bureau (MAB).

“Overall then, one would suggest that there are still motivated buyers and sellers in the current environment, although asking prices need to remain realistic both in order to secure an offer, but also to avoid issues with any mortgage valuation.”

The results contrast slightly with those from the Bank of England which noted a dip in approvals in July during an otherwise steady year.

 

A regional view

The average applicant for a residential UK mortgage was 42 in July this year, against the average buy-to-let applicant at 45 years old and first-time buyer at 31 years old.

On house price inflation, the North West and Wales are leading the charge at 13.6% and 13.5% respectively, with Greater London at the other end of the spectrum dragging at -6.5%, the East of England at -3.4% and the South East just in positive figures with 0.6%.

Rachel Geddes, a MAB mortgage broker based in London said the capital and commuter belt is a “mixed market” in terms of value with huge variety in performances due to the ongoing political and economic uncertainties.

“Interestingly, we’ve seen quite a few let to buy cases in recent weeks, which we would suggest is a direct result of those who are selling to fund an onward purchase deciding they would rather hang on to their existing property and let it out, accepting the taxation consequences of doing so, rather than selling it at below what they feel they may be able to achieve in a couple of years’ time,” said Geddes.

Remortgaging was also exceptionally busy, she added, with clients keen to refinance ahead of the summer break with five-year fixes and to a lesser degree two-year fixes proving popular.

 

Help to Buy driving new build

Another MAB adviser, Lisa Berrido based in Manchester said this July was proving busier than last with plenty of motivated buyers, particularly in new build areas taking advantage of Help to Buy.

She added that two-year deals are popular with remortgagors because many want the flexibility of returning to the market soon to secure another competitive rate rather than fixing for the longer term.

“Overall, the local market remained on an even keel last month, and as far as we observed, those who were selling mostly achieved their asking price or at least very close to it. This is possibly due to the ongoing lack of homes for sale, but equally there seems to be a reasonable degree of consumer confidence around, with the Northern Powerhouse headlines spreading a real feel-good factor.”

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