Sentiment towards the housing market looks positive as we hit 2020, according to the latest mortgage figures.

The housing market enjoyed a late autumn bounce with mortgage approvals for house purchase rising by 7% in November.

A total of 43,589 mortgages were approved by the high street banks for people moving home during the month, according to UK Finance.

There was also an increase in the number of loans approved for people remortgaging, with these rising by 12.7% year-on-year to 34,653 - the second highest level recorded in 2019.

The figures suggest confidence is returning to the housing market, despite the ongoing uncertainty surrounding Brexit.

Tomer Aboody, director of MT Finance, said: “It is positive for the market thatremortgages and mortgages for new purchases edged higher in November. 

“This reflects sentiment in the market, which has been enhanced by a strong Conservative government coming in which will support the economy and housing growth.”

Why is this happening?

The final quarter of the year is traditionally a busy time for remortgaging with competition in the market intensifying as banks and building societies cut their rates in order to meet their end of year lending targets.

As a result, not only are homeowners who are sitting on their lender’s revert rate tempted to remortgage, but people who have taken out new mortgages during this period in previous years also look for new deals as their existing one comes to an end.

The increase in mortgage approvals for home-movers is slightly more surprising, as the housing market typically slows down in the run up to Christmas.

The figures suggest that potential buyers who had previously sat on their hands due to Brexit uncertainty may now be returning to the market.

Consumer confidence is likely to have increased further since the General Election, with the Conservative’s strong majority making it more likely that the UK will exit the EU according to the current timetable.

Who does it affect?

A return of confidence in the housing market is good news for everyone.

The market is currently stuck in a vicious circle in which the lack of confidence has caused existing homeowners to delay putting their properties on the market to trade up the ladder.

The situation creates a lack of choice for people who do want to go ahead with a purchase, which in turn makes them less likely to list their own property, exacerbating the shortage of homes for sale.

The current low level of transactions is particularly bad for first-time buyers, who need people to trade up so that properties at the bottom of the ladder become available.

What’s the background?

Confidence is only one factor that affects property transactions, with affordability also playing a key role.

Affordability levels have become increasingly stretched in southern markets in the past two years following strong house price growth.

As a result, these regions saw the slowest house price rises in 2019, according to our data.

By contrast, property remains much more affordable in northern parts of the country, with property values in Wales increasing at more than twice the national average during the past year, while North West England and Yorkshire and the Humber also saw strong gains.

Top 3 takeaways

  • The housing market enjoyed a late autumn bounce with mortgage approvals for house purchase rising by 7% in November
  • A total of 43,589 mortgages were approved by the high street banks for people moving home during the month
  • There was also an increase in the number of loans approved for people remortgaging, with these rising by 12.7% year-on-year to 34,653 - the second highest level recorded in 2019

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Lenders cut mortgage rates 

Homeowners cash in on competition among lenders

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