The latest mortgage approval figures from UK Finance show that Brexit hasn’t managed to quash the British dream of homeownership, with approvals inching up for the sixth consecutive month.
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.
Managing Director of Benham and Reeves, Anita Mehra, said: “The latest figures demonstrate a very real appetite for homeownership across the UK and mark the sixth consecutive month we’ve seen mortgage approval levels exceed a healthy 42,000.
This suggests that despite our political system continuing to crumble from the inside out, the Brexit ice is starting to melt when it comes to buyer sentiment and their intent to purchase.
“While we may have to wait until the other side of the festive break to see this intent materialise into actual sales, it bodes well for the wider market given that our future in or out of Europe is yet to receive any concrete stamp of certainty.”
Mortgage approvals for home purchase were 13.5 per cent higher, remortgage approvals were 23.4 per cent higher and 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
Dilpreet Bhagrath, Mortgage Expert at online mortgage broker Trussle said: “With today’s figures showing an uptick in mortgage lending, and mortgage approvals for home purchase higher than this time last year, there clearly remains a desire for home ownership.”
“That said, high rents and current property prices relative to income are still an issue for most first time buyers. In fact, our research found 12% of current homeowners had to rely on their grandparent’s money to get enough for their deposit, with a further 23% of prospective homeowners expecting to do the same.
“While there are Government-backed schemes to help FTBs, more needs to be done to improve greater access to the market. Both Government and the industry need to step up and deliver innovative solutions to make mortgages simple and get people on the property ladder.”
John Goodall, CEO and Co-founder of buy-to-let specialist Landbay, added: “In many ways this uptick in mortgage lending doesn’t come as a surprise. Despite the continuing economic uncertainty, the truth is that demand remains strong with buyers and there is an increasing number of competitive mortgage out there for them to choose from. Similarly, it appears that some would-be buyers are getting tired of waiting for the Brexit dust to settle and have decided to make their move. Considering the current low interest rate environment, this could be a very wise decision in the medium term.”
“To be clear, this increase in lending activity should be welcomed with open arms considering how crucial it is to maintaining the resilience of the UK’s residential property market, which is so critical to the wider UK economy.
“Looking forward, as we edge towards Christmas and a potential general election, it will be interesting to see whether other would-be buyers decide to strike – or choose to hold-off until things become clearer.”
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