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In September the proportion of new mortgages in the UK approved by banks dropped to a new six-month low. However, there was a significant increase in annual numbers by around 13.5%. This is an indication that the UK property market is decelerating owing to the uncertainties surrounding Brexit.
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New home mortgages decline in September
According to UK Finance, the banking trade agency the number of loans for new homes in September was 42,310 loans. This is a decline from the 42,527 loans reported in August. However, the banking body has indicated that the number of remortgaging increased to 32,649 reflecting a 23.4% growth. This is the highest monthly level recorded in almost two years.
Interestingly UK Finance indicated that there is some exaggeration on the strength of the yearly improvement. This is because a year ago mortgage lending was uncharacteristically low. Therefore the annual difference reported this time seems larger than anticipated.
September mortgage numbers exaggerated
For this reason, several analysts are being careful regarding the housing market. UK Finance warned that September was a quiet month and thus making annual comparison distorted. However, according to Capital Economics’ property economist Hansen Lu, strong annual growth is a sign of change in the market. He adds that the preference is to leading high street banks. Currently, the mortgage market is stagnant with high house prices expected to hold it back going forward.
Former RICS residential Chairman Jeremy Leaf indicated that the figures look promising despite the on-going Brexit uncertainties. Leaf also has reservations regarding the numbers considering last year the same period the market was flat. Therefore the September numbers give an unrealistic promise. Nevertheless, they show that sellers and buyers are carrying on although at more appealing price levels.
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The impressive yearly numbers according to Howards Archer EY Item Club’s economic advisor are a result of enhanced earning growth. This is a result of high employment recorded recently. He added that the fact that the mortgage approvals declines are a sign that the housing market remains stifled amid growing uncertainties.
Fleet Mortgages launches a new product
Fleet Mortgages recently unveiled a new product which is a 5-year house in multiple occupation product fix. The lender equally cut rates on its various mortgage products. They offer the HMO fix product for up to 75% loan to value a 3.50% rate. Equally the product has a 125% initial rate as well as a 1.5% fee.
Following the launch Fleet Mortgages indicated that they were responding to feedback from partners and also the increasing demand for high-returns HMO properties. Fleet Mortgages has a new funding partner in One William Street Capital Management. OWS brought a significant amount of around £1.4 billion to lend in the purchase-to-let market in the UK.
The director of Fleet Mortgages Steve Cox said that there has been an increase in activity in the buy-to-let market this year. He added that they have what it takes to offer customers what they need to capitalize on the market conditions and strengthen their portfolios.
Rebecca White is chief editor at CreditRaters.com. Rebecca has an extensive amount of knowledge on financial subjects including short-term loans & debt consolidation in the UK and USA. Rebecca has wrote for many publishers such as Debt Secret, My Money, VL and more.