Gross mortgage lending for September 2019 stands at £22.3 billion

According to the latest Household Finance Update from UK Finance, Gross mortgage lending across the residential market in September 2019 was £22.3 billion, 3.7 per cent higher than in the same month in 2018.

  • There were 85,880 mortgages approved by the main high street banks in September 2019.
  • Mortgage approvals for home purchase were 13.5 per cent higher, remortgage approvals were 23.4 per cent higher.
  • Approvals for other secured borrowing were 8.5 per cent higher than in September 2018, which was a particularly subdued month for the mortgage market.

THE ECONOMY

  • The Office of National Statistics reported that the Consumer Prices Index including owner occupiers’ housing costs (CPIH) 12-month inflation rate was 7% in September 2019, unchanged from August 2019
  • The Consumer Prices Index (CPI) 12-month inflation rate was 1.7% in September 2019, unchanged from August 2019

HOUSING

Only minor changes month on month in the UK housing market according to Nationwide figures:

  • Annual house price growth dipped to 0.2% in September
  • Modest 0.2% price fall during the month, after taking account of seasonal factors
  • Annual price declines persist in London and the South East
  • Average Price (not seasonally adjusted) £215,352

Commenting on the figures, Robert Gardner, Nationwide’s Chief Economist, said:

“The underlying pace of housing market activity has remained broadly stable, with the number of mortgages approved for house purchase continuing within the fairly narrow range prevailing over the past two years. Healthy labour market conditions and low borrowing costs appear to be offsetting the drag from the uncertain economic outlook.”

Support for reservation agreements

Chestertons estate agency have spoken out in favour of reservation agreements, supporting the latest initiative from the Ministry of Housing, Communities and Local Government, reveal Estate Agent Today.

“Property transactions fall through far too frequently and this is due to a wide range of factors, including changes in personal or financial circumstances, changes of heart and disagreements over specific terms of the deal. We hope the government takes steps to ensure that people who do have to pull out of a deal for reasons beyond their control are not penalised, although what constitutes a ‘good’ fall-through and a ‘bad’ one will no doubt be subject to a lot of debate.” says Guy Gittins, Chestertons’ managing director.

According to the Home Owners Alliance Survey more than 300,000 property transactions collapse every year due to broken chains and buyers changing their mind.

The MHCLG has said that a trial of reservation agreements will take place in the New Year, in two so-far unspecified regions of the country; the conveyancers and agents who will be involved have also not been selected yet, according to Estate Agent Today.

Mortgage Lenders and Administrators Statistics – 2019 Q2

The Mortgage Lenders and Administrators Return (MLAR) is a quarterly statistical release aggregated from data on mortgage lending activities provided by around 340 regulated mortgage lenders and administrators. Key findings released in September include:

  • The outstanding value of all residential mortgage loans was £1,461 billion in 2019 Q2, 3.1% higher than a year earlier.
  • The value of gross mortgage advances was £66.1 billion in 2019 Q2, 1.0% lower than a year ago.
  • The value of new mortgage commitments (lending agreed to be advanced in the coming months) was broadly unchanged compared to a year earlier, at £73.4 billion.
  • The share of mortgages advanced in Q2 with loan to value (LTV) ratios exceeding 90% was 5.5%, the highest since 2008 Q4.
  • The share of gross mortgage lending for buy-to-let purposes (covering house purchase, remortgage and further advance) was 13.1%, in line with a year earlier.
  • Lending to owner-occupiers for house purchase accounted for 50.5% of total gross mortgage advances in Q2. Of this, 21.3% was to first-time buyers, which is consistent with a year earlier. The share of lending to home movers increased marginally in the year to 29.2%.

Sources:

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

https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/september2019

https://www.nationwide.co.uk/-/media/MainSite/documents/about/house-price-index/2019/Sep_Q3_2019.pdf

https://www.estateagenttoday.co.uk/breaking-news/2019/10/another-agency-backs-reservation-agreements-to-cut-fall-throughs

https://hoa.org.uk/2018/05/selling-pain-points/

https://www.bankofengland.co.uk/statistics/mortgage-lenders-and-administrators/2019/2019-q2