Market steady despite interest rate rise and Autumn Budget

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The Mortgage Advice Bureau National Mortgage Index - December 2017

 

 

In a month bookended by the first interest rate rise in nine years, and a windfall for First Time Buyers with an exemption on Stamp Duty and Land Tax (SDLT) introduced in Chancellor Hammond’s maiden Autumn Budget, the UK housing market proved reasonably resilient.

Overall, the data for November saw prices hold firm in many areas in terms of purchase prices, and although growth was limited, given that we would expect to see a slight cool-down in prices as we head towards the holidays as is seasonally the norm, the fact that most areas saw a small increase in prices suggests that consumer confidence remained undimmed by the 25 bps rise. With this in mind, we observed slight movements on key indicators, including:

  • Average purchase price in November 17 rose slightly to £248,202 from £246,782, a 0.6% month on month increase.
  • Average remortgage loan size decreased in November 17 to £174,402 from £176,186 in October 17, a 1% fall on the previous month.
  • Average First Time Buyer purchase price dropped very slightly in November 17 to £192,464 a fall of 0.4% on the previous month (£192,464).

Mortgage Advice Bureau data is based upon mortgage applications, therefore this provides a reliable indicator in terms of consumer activity.

On a regional basis, topline data for the South West of England is as follows:

South West Average Statistics – November 2017 data

Purchase Mortgage

Remortgage

Average LTV %

68%

57%

Average loan size

£164,187

£152,514

Average age

39

42

Average income

£33,408

£33,095

Average property value

£248,760

£264,781

Nigel Bull from Mortgage Advice Bureau in Bristol comments:

“November was steadily busy for us, certainly well within seasonal expectations. The Interest rate decision at the beginning of the month wasn’t a surprise, but the announcement of the Stamp Duty exemption scheme for First Time Buyers certainly was, which added a real bonus to those who were already in the process of purchasing their first home but hadn’t yet completed."

"In terms of remortgages, we’d already seen a lot of people the previous month as the rate change was so well signposted. Therefore, many of our clients who were remortgaging in November were actually looking to raise capital to fund renovation projects in early 2018, saying that as they couldn’t find what they want to buy in order to move home, they were shelving moving plans in order to stay put and improve instead."

Nigel continued: "Overall as far as we observed last month, both in terms of purchase and remortgages, two and three year fixes were still by far and away the most popular with clients, as they provide certainty for the near future, as well as flexibility if needed."

"Property prices locally remain steady; there still aren’t enough properties for sale so realistically priced homes are selling quickly.  That said though, vendors shouldn’t be too aspirational in their asking price, as if they are over-ambitious then the property will stick on the market.”

 Mortgage Advice Bureau National Mortgage Index - December 2017

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