Gross Mortgage Lending for June

 

According to the latest Household Finance Update from UK Finance, gross mortgage lending for June 2018 is £23.5bn, 2.1% higher than a year earlier.

THE ECONOMY

The Office of National Statistics reported the Consumer Prices Index including owner occupiers’ housing costs (CPIH) 12-month inflation rate was 2.3% in June 2018, unchanged from May 2018.

  • Credit card spending was 4.7 per cent higher than a year earlier, with outstanding levels of card borrowing having grown by 5.6 per cent over the year.

HOUSING

  • Estimated gross mortgage lending for the total market in June is £23.5bn, 2.1 per cent higher than a year earlier.
  • Within this figure, remortgaging approvals increased and were 3.4 per cent higher than for the same period a year earlier, this was offset by the 4.7 per cent fall in house purchase approvals and 4.3 per cent fall in other secured borrowing.

Eric Leenders, Managing Director, Personal Finance at UK Finance commented:

“Lending to households has continued to grow modestly in line with recent trends. Meanwhile growth in mortgage lending continues to be driven by remortgaging, as borrowers take advantage of attractive deals ahead of an anticipated Bank rate rise.”

HALIFAX HOUSE PRICE INDEX

House prices continue to remain broadly flat, with the annual growth rate marginally slowing from 1.9% in May to 1.8% in June. The average Price of a UK home is currently £225,654.

BANK OF ENGLAND BASE RATE RISE FROM 0.5% to 0.75%

  • On the 2nd August 2018 the Bank of England increased their base rate from 0.5% to 0.75%                                                                                             
  • This is only the third base rate change in almost a decade – and only the second time it has been increased during that time.
  • The rise was already predicted by most experts, financial insiders and mortgage providers, lenders and banks had already begun to make small adjustments to their product offerings and deals.
  • The impact for homeowners and mortgage holders should be minimal. Many UK homeowners are locked into fixed-rate mortgages and will not feel the immediate impact from a base rate rise. Rates are still very low by historical standards. The base rate was at 5% when the Global Financial Crisis hit in 2007.

MORTGAGE APPROVALS

  • Bank of England figures show 65,619 mortgage approvals were made to purchasers in June. This represents a five-month high, although still down year-on-year.

Henry Knight, Managing Director of Springtide Capital commented:

‘The number of mortgages approved for house purchases increased in June, to just short of 66,000. This is a modest rise but encouraging to see in the current market’

Sources:

https://www.ukfinance.org.uk/household-finance-update-june-2018/

https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/june2018

https://www.bankofengland.co.uk/statistics/money-and-credit/2018/june-2018

https://www.bankofengland.co.uk/monetary-policy-summary-and-minutes/2018/august-2018

https://www.buyassociation.co.uk/2018/06/12/lenders-explore-new-ways-to-attract-customers-with-low-tracker-rate/