Mortgage Market Briefing - May 2019 - e.surv Chartered Surveyors

Market Insight, Mortgage Market Briefing //

Mortgage Market Briefing – May 2019

The number of first-time buyers taking out mortgages fell for the first time since September 2018 but the remortgage market has remained buoyant.

The number of first-time buyers taking out mortgages fell for the first time since September 2018 but the remortgage market has remained buoyant.

Data published by the UK Finance trade body showed that there were 28,800 new first-time buyer mortgages completed during March 2019. This represents a 2.4% fall compared to the same month a year ago. Home mover mortgages also dropped, falling 6%, during the last 12 months.

However, other parts of the market continue to perform impressively. The number of remortgages with additional borrowing grew by 9.1% year-on-year to hit 16,810. The is the twelfth successive month that the number of remortgage completions has grown, and this continues to be the key driver of the overall mortgage market.

The struggles in the buy-to-let market were once again apparent as the number of purchase deals fell by 9.1%, however there were some positive signs as the number of landlords remortgaging grew by 3.9% compared to a year ago.

Perhaps thanks to the slowdown, mortgage lenders are increasingly offering new mortgage incentives to lure in customers. Research published by Moneyfacts, the data provider, showed that the number of mortgages that offer cashback incentives, free valuations or free legal fees have risen year-on-year.

The number of deals offering free valuations has rocketed from 2,909 to 3,336 in the last two years while those offering free legal fees have grown from 2,305 to 2,435. Meanwhile the number of loans offering some form of cashback has passed the 1,000 mark, growing from 920 to 1,518 between May 2017 and this month.

In some instances, lenders are offering more than £1,000 in cash to draw in new customers.

This will be of great benefit to customers in the areas of the country with the highest house prices, particularly given that the rate of increase has picked up in the last month.

The average house price grew by 1.4% in the year to March 2019 to hit £227,000, according to the Office for National Statistics. This annual growth rate is higher than the 1% recorded in February.

The region with the fastest price growth was Yorkshire and the Humber, where prices grew by 3.6% in the last 12 months. This was followed by the West Midlands (3.4%) and then Scotland (3.3%).

In Northern Ireland, where prices are measured on a quarterly basis, the average house price grew by 3.5% between the first quarter of 2019 compared to the previous year. It remains the cheapest UK country to purchase a property in, with the average house price standing at £135,000.

The average price in Scotland is now £149,000, in Wales that figure is £159,000 and in England it is £243,000.

However, where you buy can have a huge impact on the price paid for a new home. Separate data published by Halifax showed that those looking for a seaside home face wildly different prices depending on where in the country the property is located.

Sandbanks in Poole was named Britain’s most expensive seaside town for the fourth year running. Average prices in the town are £785,426.

Nine of the ten cheapest seaside towns were located in Scotland, the smallest house prices being found in Port Bannatyne, which had an average price of £86,830.

Richard Sexton – Business Development Director, e.surv Chartered Surveyors