Gross Mortgage Lending November and December 2018

Gross mortgage lending for December stands at £21.1bn

 

According to the latest Household Finance Update from UK Finance, gross mortgage lending for December 2018 was £21.1bn. This is 4.7% higher than a year earlier.

 

  • Gross mortgage lending across the residential market during 2018 was £267.5bn, some 3.8 per cent higher than in 2017.

 

  • The number of mortgages approved by the main high street banks in December 2018 was 2.4 per cent lower than the same month the previous year; approvals for home purchase were 5.3 per cent higher.

 

  • Remortgage approvals were 5.8 per cent lower and approvals for other secured borrowing were 18.9 per cent lower.

 

 

MORTGAGE MARKET ACTIVITY

The Bank of England summarised that mortgage market activity has been broadly stable since 2016, and this trend has continued.

  • Households borrowed £4.1 billion secured against property in December, slightly above the average of the previous six-months

 

  • Mortgage approvals for house purchase (an indicator of future lending) were around 63,800 in December, unchanged from November, but slightly below their 2018 average of around 65,200.

 

Henry Knight from Springtide Capital commented:

‘In 2019, we’re expecting to see continued stability in house prices. Brexit however could potentially impact this outcome. The need to raise a significant deposit is a factor for those looking to buy a new home, limiting the number of potential purchasers. The continuation of the Help to Buy London scheme until March 2023, will help potential new build purchasers greatly. The government will lend buyers up to 40% of the cost of a new build home in London’.

 

HALIFAX HOUSE PRICE INDEX

 

  • Prices in the three months to December were 1.3% higher than in the same three months a year earlier – up from the 0.3% annual growth rate recorded in November

 

  • House prices in the latest quarter (October-December) were 0.4% lower than in the preceding three months (July – September)

 

  • On a monthly basis, house prices increased by 2.2% in December, following a 1.2% fall in November

 

  • The average house price in the UK is now £229,729.

 

THE ECONOMY

The Office of National Statistics reported that the Consumer Prices Index including owner occupiers’ housing costs (CPIH) 12-month inflation rate was 2.0% in December 2018, down from 2.2% in November 2018.

 

The Consumer Prices Index (CPI) 12-month rate was 2.1% in December 2018, down from 2.3% in November 2018.

 

Sources:

https://www.ukfinance.org.uk/data-and-research/data/household-finance/household-lending-and-deposits

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

https://www.helptobuylondon.co.uk/

https://static.halifax.co.uk/assets/pdf/mortgages/pdf/December-2018-House-Price-Index.pdf

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

mber2018 

 

Gross mortgage lending for November 2018 was £23.1bn

 

According to the November Household Finance Update from UK Finance, gross mortgage lending for November 2018 is 2.0 percent than the same time last year.

 

  • The number of mortgages approved by the main high street banks in November was 10.6 per cent lower than November 2017
  • Remortgage approvals were 20.3 per cent lower, and approvals for other secured borrowing were 12.2 per cent lower.
  • The Consumer Prices Index including owner occupiers’ housing costs (CPIH) 12-month inflation rate was 2.2% in November 2018, unchanged from October 2018.
  • Approvals for house purchase were 1.2 per cent lower

 

  • HOUSING

The Mortgage Finance Gazette reported there were 36,200 new first-time buyer mortgages in November, which is 5.8% more than in the same month a year earlier.

First time buyers took out £6 billion in November, which is a rise of 9.1% year-on-year.

The number of new home mover mortgages was also 36,200, but this was just 1.1% more than in the same month a year earlier. New lending totalled £7.8 billion – 4% more year-on-year.

The average first-time buyer is 30 and has a gross household income of £42,000 compared to the average home mover who is 39 with a gross household income of £55,000.

 

Mortgage product transfer figures for Q3 2018

  • 291,900 homeowners switched product with their existing provider (product transfers) in the third quarter of 2018.

 

  • By value, this represents £38.7bn of mortgage debt refinanced internally. These figures do not feature in any market data on remortgaging, or other published gross mortgage lending data.

 

  • Of the total number of product transfers, 156,900 transfers, worth £21.4bn, were conducted on an advised basis and 135,000 transfers, worth £17.3bn, were execution-only.

 

Commenting on the Q3 2018 data, Jackie Bennett, Director of Mortgages at UK Finance said:

“These latest figures show that customer engagement remains high and the majority of mortgage customers switch to a new deal shortly after their previous deal expires.

Those who require help in choosing the right product, mortgage advice is widely available through both direct channels and from intermediaries, with more than half of borrowers taking advice for their new deal.”

Henry Knight, Managing Director of Springtide Capital commented:

‘Mortgage brokers are not tied to any one lender or range of products, our goal is to help you successfully finance your home or property. In the period prior to your current deal expiring, we will approach you to determine how we can help. We can draw quickly from available mortgage products that match your needs, and we can decide together on what’s right for you’.

 

Halifax House Price Index

  • Prices in the three months to November were 0.3% higher than in the same three months a year earlier – slowing from the 1.5% annual growth recorded in October, and recording the lowest rate of growth since December 2012

 

  • House prices in the latest quarter (September-November) were 1.1% lower than in the preceding three months (June – August)

 

  • On a monthly basis, house prices fell by 1.4% in November, making three monthly falls out of the last four

 

  • The average house price for November is £224,578

 

Sources:

https://www.ukfinance.org.uk/household-finance-update-%E2%80%93-november-2018

https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/november2018

https://www.mortgagefinancegazette.com/lending-news/mortgage-lending-figures/november-sees-rise-number-first-time-buyers-17-01-2019/

https://www.ukfinance.org.uk/uk-finance-publishes-mortgage-product-transfer-figures-q3-2018

https://static.halifax.co.uk/assets/pdf/mortgages/pdf/November-2018-House-Price-Index.pdf