Gross Mortgage lending for December 2019

Gross mortgage lending for December 2019 stands at £22.2 billion

According to the latest Household Finance Update from UK Finance, Gross mortgage lending across the residential market in December 2019 was £22.2 billion. The annual total for 2019 to £265.8 billion. Although annually 1.1 per cent lower than in 2018, the last two years have broadly reflected the continuation of a stronger long term lending trend over recent years.

  • An annual total of 982,286 mortgages were approved by the main high street banks during 2019, 7.4 per cent more than in 2018
  • The full year number of mortgages approved for home purchases were 8.0 per cent higher, remortgage approvals were 7.9 per cent higher and approvals for other secured borrowing were 3.0 per cent higher than in 2018

THE ECONOMY

The Office of National Statistics reported that the Consumer Prices Index, including owner occupiers’ housing costs (CPIH) 12-month inflation rate was 1.4% in December 2019, down from 1.5% in November 2019.

The Consumer Prices Index (CPI) 12-month rate was 1.3% in December 2019, down from 1.5% in November 2019.

HOUSING

There was an annual house price growth of 1.4% in 2019 according to Nationwide figures:

  • Prices rose 0.1% in December, after taking account of seasonal factors
  • Annual price declines persist in London and the Outer South East
  • The average house price in December (not seasonally adjusted) was £215,282
  • Raising a deposit remains key challenge for prospective first time buyers

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

“Looking ahead, economic developments will remain the key driver of housing market trends and house prices. Much will continue to depend on how quickly uncertainty about the UK’s future trading relationships lifts as well as the outlook for global growth. Overall, we expect the economy to continue to expand at a modest pace in 2020, with house prices remaining broadly flat over the next twelve months.”

The FCA in their statistics on mortgage lending December 2019 edition, released the following key findings in relation to Q3:

  • The outstanding value of all residential mortgage loans was £1,486 billion in 2019 Q3, 3.9% higher than a year earlier.
  • The value of gross mortgage advances was £73.3 billion, broadly unchanged in comparison to 2018 Q3.
  • The value of new mortgage commitments (lending agreed to be advanced in the coming months) was 1.1% higher than a year earlier, at £73.8 billion.
  • The share of gross mortgage lending for buy-to-let purposes (covering house purchase, remortgage and further advance) was 12.3%, consistent with 2018 Q3.

Help to Buy Isa applications close for start of December

The final providers of the Help to Buy Isa – aimed at saving for a first home deposit – closed the window for new applications on 1st December 2019. The product, which has been available since December 2015, allowed potential first-time buyers aged 16 or over to save, with the income free from tax.

This was then topped up with a government bonus of up to £3,000. Nearly 260,000 properties have been bought using the Isa across the UK, Treasury figures show. The data also revealed that 339,747 bonuses have been paid through the scheme, with an average value of £943. The biggest proportion was in the North West of England. Whilst the scheme officially closed to new accounts, account holders can keep on saving until autumn 2029, with bonuses needing to be claimed by 1 December 2030.

The Equity Release Council

Membership of the Council has almost doubled in two years. Membership has increased from 219 to 431 firms since December 2017 – reflecting the increasing role of property wealth in later life financial planning with more firms signing up to the organisation’s best practice standards.

David Burrowes, Chairman of the Equity Release Council, commented:

“The option of accessing property wealth increasingly registers on people’s radar when planning for later life. The Council’s growing membership means more people can access the highest level of consumer protection for any property-based loan when exploring whether equity release or alternative products can help to meet their needs”

Henry Knight, Managing Director of Springtide Capital commented:

‘Due to many factors including the UK population living longer, equity release products have become more in demand. They have also become more accessible and competitive within the market and schemes ensuring advisors adequately meet the needs of their customers is crucial.’

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/december2019

https://www.nationwide.co.uk/-/media/MainSite/documents/about/house-price-index/2019/Dec_Q4_2019.pdf

https://www.fca.org.uk/data/mortgage-lending-statistics

https://www.bbc.co.uk/news/business-50598913?intlink_from_url=https://www.bbc.co.uk/news/topics/cpzp21mjmggt/mortgages&link_location=live-reporting-story

https://www.equityreleasecouncil.com/news/council-membership-almost-doubles-in-two-years/