A turbulent year for the UK property market ended on a high
note in December, due to an impressive month for mortgage approvals, according
to the latest Mortgage Monitor from e.surv.
The chartered surveyor found that 66,390 mortgages were
approved during the final month of 2018, on a seasonally adjusted basis.
December is often a quiet month for mortgage approvals,
given that fewer people purchase properties at that time of year. However, last
year, the number of approvals was 4.2% higher than November’s figure.
Even more impressively, December’s 2018 total was up by 7.8%
on an annual basis.
There are several reasons for this boost in activity. In a
year when homeowners had to contend with a further
rise in the Bank of England base rate, competition between banks and
building societies helped to keep rates at a historically low level.
The base rate rise in August 2018 was the catalyst for many
existing homeowners to remortgage to a cheaper deal, of which many were
available. By the end of the year, lenders were cutting rates to meet ambitious
end-of-year lending targets.
Lenders also became more receptive to first time buyers and
other purchasers with smaller deposits, with an increase in the number of 5%
deposit mortgage deals on the market.
By December, 25.2% of all loans went to borrowers with a
small deposit. This was down marginally on November’s 25.9% figure, but higher
than other recent months.
Richard Sexton, the Director of e.surv, says: “2018 saw the second base rate rise in
less than a year, continued uncertainty over Brexit and wider global economic
the mortgage market demonstrated its resilience, with strong activity in most
segments of the market.”
continues: “First time buyers, remortgage customers and second steppers all
jumped at the chance to bag a cheap mortgage rate while they last.
outlook for 2019 is again one of uncertainty, but the figures from the final
few months of 2018 suggest that the mortgage market has the power to battle
through tough market conditions.”
Small deposit borrowers
After a strong performance in previous months, the proportion of loans going to small deposit borrowers fell back slightly in December, accounting for 25.2% of the overall mortgage market.
proportion of large deposit borrowers grew strongly on a monthly basis in
December, rising from 28.9% in November to 30.1%.
meant that the proportion of mid-market borrowers ticked down, from 45.2% to
absolute basis, the amount of small deposit borrowers dropped from 17,381 to
comments: “Following the outstanding
November figures for small deposit borrowers, some drop off was to be expected
“Even so, almost
17,000 first time buyers and other small deposit borrowers were able to get
onto the housing ladder this month.”
Yorkshire best for small deposits
In a year where the
northern regions of England and Northern Ireland competed for the title,
Yorkshire ended 2018 as the best location for first time buyers and others with
small deposits to purchase a property.
In Yorkshire, 32.3%
of all loans went to this type of borrower, ahead of its two major rivals.
In Northern Ireland,
31.5% of mortgage approvals were to small deposit borrowers, while the North
West recorded 31.4%.
This type of buyer
had a much tougher time in London and the surrounding regions.
In the capital, just
15.1% of loans went to small deposit borrowers, while, in the South East, this
figure was 21.6%.
borrowers enjoyed a much greater share of the London market, at 39.2%. The
South East was close behind, at 36.2%.
The North West,
Northern Ireland and Yorkshire were the only regions to see a greater
proportion of mortgages go to small deposit borrowers than their large deposit
Sexton concludes: “The
year ended much as it began when it comes to the regions of the UK. Those
borrowers in the north of England and Northern Ireland tended to have small
deposits when buying a home.
“By contrast, those
in London and the Home Counties usually require a significantly larger deposit
in order to buy their desired property.
“The New Year will
see a new batch of first time buyers trying to get onto the ladder, and those
existing homeowners look to move to their next home.”
Sign up to Landlord News for FREE today to receive:
Monthly newsletter with round-up of updates
Guides to legislation and best practice
Latest daily news from across the sector
In-depth features with comments from industry experts
Sorry to see you go. If you close your account with Landlord News, you won’t be able to access free and exclusive content, and you won’t receive our amazing newsletters anymore. Are you sure you want to proceed?
LandLord News asks you to accept cookies for the performance of our site only. We do not enable any cookies which track your browser usage or for advertising purposes. To read our full policy, please click here