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Resi gross lending subdued as mortgage approvals rise in March – UK Finance

  • 26/04/2019
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Resi gross lending subdued as mortgage approvals rise in March – UK Finance
The number of mortgages approved by the main high street banks in March 2019 increased by 9.1% year-on-year, data showed.


In March 2019, the number of approvals for home purchases rose by 9.3% to 42,328 from 33,621 in February 2019 and 38,710 in March 2018, according to the latest figures released by UK Finance.

In March 2019, remortgages were 11.1% higher to 30,063 from 24,281 in the previous month and 27,057 in the same month a year ago.

The report also showed that other secured borrowing increased year-on-year by 1.7% to 9,239.

However, gross mortgage lending across the residential market in March 2019 dipped by 0.5% to £20bn from the same month a year ago.

The £10.5bn of credit card spending in March 2019 was 8.1% higher than the same month in 2018, whilst personal borrowing through loans was 6.8% higher than the same month a year ago, but remains well below the levels of personal borrowing seen in March 2017.


More lenders target self-employed

Andrew Montlake, director of Coreco, said that this week in particular has seen a huge surge in mortgage enquiries.

He added: “Whereas, three to six months ago, Brexit uncertainty held many prospective buyers and sellers in shackles, those shackles are increasingly off. There’s always a surge in activity levels during the Spring but this year it has been accentuated by the pent-up demand caused by Brexit.

“Lender competition has never been as fierce as it is now and borrowers are reaping the rewards. What we’re also seeing is more and more mainstream and niche lenders target the self-employed in a bid to get funds into the market. If you’re self-employed, there has never been a better time to take out a mortgage.

“First-time buyers continue to make hay while the sun shines. With many amateur landlords having thrown in the towel, support from the Help to Buy scheme, lower property prices and rates at higher LTVs improving all the time, getting that first leg on the ladder is now far less of a challenge.

“Those who aren’t buying are remortgaging in order to improve their homes, and many are picking up an even more competitive rate as they do so.”


BTL investors not completely replaced by FTBs

Jeremy Leaf, north London estate agent and a former RICS residential chairman, said that mortgage approvals for home purchase are always a useful lead indicator of future market activity and these are no exception.

He added: “They confirm what we have been seeing on the ground and in other surveys – that transactions are holding up reasonably well despite political and economic distractions as might be expected at this time of year.

“However, it is still tough to find common ground between even realistic buyers and sellers, and sales are certainly taking considerably longer, not least because as we are finding, buy-to-let investors have not been replaced completely by first-time buyers.

“The picture is very patchy and can vary considerably between areas which are quite close together and between London and elsewhere.”


Brexit getting less attention

Gareth Lewis, commercial director of property lender MT Finance, said that these numbers come as no surprise and gross lending is subdued because the first quarter has been stagnant as a result of the Brexit wait.

He added: “However, as far as the second quarter of the year and beyond is concerned, if the levels of activity we are seeing are anything to go by, the picture may be changing. With Brexit pushed back, far enough away for people to forget about it a little, and with fewer column inches in the papers, this is all a positive as it stops people from worrying about it too much. They are getting on with life, looking at opportunities to improve their portfolios – from an investment point of view, Brexit is getting less attention now, which has to be a good thing.

“The one thing that is quite encouraging is that more people are paying back their credit card debt; when credit card debt is creeping up, it means people are living beyond their means but in this case it’s healthy that people are paying that debt down.”


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