Taylor Scott International News
Gross mortgage borrowing in the UK in January was £9.8 billion, some 11% lower than in the same month last year, according to the latest data from the British Banking Association. Despite slower demand in the second half of 2014, the overall mortgage stock is 1.4% higher than a year ago and approvals overall in January were slightly below December and 21% lower than a year ago. The data also shows that although turning up slightly in January, house purchase approvals were 20% lower than last January and remortgaging and other approvals continued to trend downwards and were 21% and 25% lower than a year ago respectively. According to David Whittaker, managing director of Mortgages for Business, while the mortgage market may have slowed since the peaks seen in the first half of 2014, the present lull is no cause for serious concern. ‘The spate of lending regulations introduced throughout last year inevitably put breaks on the mortgage market, arguably that was precisely the objective, and as a result activity clearly tapered off towards the end of last year. Borrowers and lenders alike have been factoring in and adjusting to the new regulatory landscape and rightfully exercising caution to ensure healthy balance sheets,’ he said. ‘However, that brake has coincided with a downhill ride for long term borrowing costs, after an almost entirely unexpected shift in global capital markets. This has ushered in even lower new mortgage rates than previous record lows,’ he explained. ‘Essentially, we’ve moved on a long way since the fourth quarter of 2014 and in recent weeks we’ve been seeing landlords take advantage of some incredible deals, especially at the most competitive 75% LTV range. In particular, prudent borrowers are aiming to lock in such low rates now that a five year fix is just as cheap as many variable rate deals. Activity may be below levels seen last year but this is not a reliable indicator of the year ahead,’ he added. Patrick Bamford, director of Mortgage Insurance Europe for Genworth, believes that mortgage lending on the high street falling by almost a third since January 2014 is a damp start to the year. ‘Aspirational first time buyers and home movers face multiple challenges: high house prices relative to wages, strict mortgage lending criteria and a lack of house building,’ he said. ‘Despite a wave of new high loan to value (LTV) products appearing on the market, first time buyers still face financial pressures from every direction. Unless they have a large deposit, they are left paying a far greater premium for 95% LTV mortgages than before the recession,’ he pointed out. He also pointed out that while Help to Buy has certainly invigorated the product range for first time buyers and provided a much needed boost to high LTV activity, greater lender appetite and competition needs to be encouraged to give buyers better rates. ‘There… Continue reading →
The post High street lending in UK down 11% compared to a year ago appeared first on Taylor Scott International.
Taylor Scott International
Taylor Scott International, Taylor Scott