Following six consecutive, market-defying months of growth, the number of mortgages approved in October slipped as the market holds its breath in the run up to the 12 December election.
The latest figures show that mortgage approvals were marginally lower than expectations with 41,219 rubber-stamped in October, down from 42,216 in September. However, these figures can still be interpreted as something of a triumph given the circumstances.
Director of Benham and Reeves, Marc von Grundherr, said: “Buyer demand in the way of mortgage approvals has remained consistent despite wider market uncertainty but these certainly aren’t the worst set of figures considering the wider landscape and the seasonal influence that slows the market in the lead up to Christmas.
“The good news is that people are still buying homes despite the political paralysis we’ve been subjected to in recent months and while we may have a long winter ahead, there are plenty of positives to take.”
The UK Finance household lending and deposits data showed that gross mortgage lending across the residential market in October 2019 was £25.5 billion, 0.9 per cent lower than in the same month the previous year.
John Goodall, CEO and Co-founder of buy-to-let specialist Landbay, said: “While these figures are disappointing, they come as no surprise, considering the economic and political pressures the market has been facing. The reality is that lenders are ready and willing to lend, instead it’s would-be buyers who need that final nudge to make their move.
“Looking forward, with the election looming, we may finally see the cloud of uncertainty begin to lift – assuming there is a clear parliamentary majority. If this does happen, we could see a spike in demand as those who were holding off in recent years consider making their move in 2020. With their genuine appetite to lend, lenders will be gearing up to facilitate any increase in demand.”
Certainly, there are signs that the property market could get a second wind post election. Historically, elections have little impact on property prices; however, this is no ordinary election, tailing three years of uncertainty and representing a third march to the polls in as many years.
Dilpreet Bhagrath, Mortgage Expert at online mortgage broker Trussle said: “With the UK’s political uncertainty ramping up in the run up to December’s General Election, it’s not surprising to see that mortgage lending has fallen, however slightly. It’s possible that many would-be buyers are adopting a ‘wait and see’ approach to see how this might affect the market.
“However, both the Labour and Conservative parties have set out major plans to tackle the UK’s housing crisis. Jeremy Corbyn has promised the biggest affordable house building programme since the 1960s, including 100,000 new council houses a year by 2024. And Boris Johnson plans to introduce a new mortgage with long-term fixed rates, requiring only a 5% deposit, to help renters buy their first homes.
“Getting a mortgage is often one of the biggest financial and emotional commitments a person will make in their lives and ensuring the Government and the industry is supporting borrowers as they take this step is crucial.”
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