Affordability factors increase bank lending levels
Mortgage rates remain at an all-time low within the UK, as the Bank of England confirm that rates will stay the same following on from the unanimous vote at the November monthly meeting.
So while there may be uncertainty around what will happen with Brexit following the High Court ruling that the decision to leave the EU rests not with Teresa May’s Government, but with the Parliament. The conditions surrounding the housing market remain favourable with the combination of solid labour conditions and historically low borrowing costs helping to fuel and support buyer confidence. House prices have remained relatively stable rising consistently over the past 15 months with an annual rise average of 5% on the year. October sees the first month of stable prices, which still leaves growth in line with expectations for the year. The latest Nationwide House Price Index puts the average property price at £205,904, however as always there are huge regional variations.
Mortgage approvals for September edged up to a 62,932 high ahead of predictions, demonstrating how the low interest rates have had a positive effect on buyer affordability. So despite increased property prices over the past 15 months, mortgage payment levels as a percentage of take home pay have remained unchanged. This is leaving buyers feeling buoyant and surveyors report that new buyer enquiries have increased over the past few months.
The market is also lifted by relatively low stock levels of available properties for sale meaning that properties that are available on the market are holding their prices. The latest monthly poll from the National Association of Estate Agents (NAEA) recorded a 16 per cent rise from August, taking demand back to levels last seen before the EU referendum in June.
Predictions prior to Brexit that stated property prices could fall by 10% are proving to be untrue and the current market outlook remains positive.
Author: Sussanne Chambers - HomeXperts