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'Buyers sitting on their hands' as mortgages for purchase fall again

Total mortgage approvals by the main High Street banks increased three per cent in May over the same month last year - but the main driver for the surge is remortgaging rather than buying homes afresh.

The number of mortgage approvals for house purchases actually dropped by 3.8 per cent when compared to May last year.

Remortgage approvals were up 18 per cent last month compared to May 2017 with borrowers said to be looking to take advantage of low fixed rates ahead of interest rate rises expected later this year - and possibly as soon as next month.

Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “Many buyers and sellers are sitting on their hands and those that are recognising the new reality in this price-sensitive market are negotiating hard but transactions are taking longer as a result. Encouragingly, the number of listings and viewing appointments is rising but choosy buyers are taking their time to make decisions.”

Alan Collett, fund manager at Hearthstone Investments, says:  “Despite the headline mortgage figures, the fundamentals for residential property as an investment remain: the demand for private rental housing remains strong especially for well-managed, high quality modern properties. 

“House prices continue to hold steady across most of the UK outside London, with prices rising in parts of the country, particularly across the Midlands and some of the northern regions. We believe house price and rental growth in these areas will continue, as average earnings have kept pace with house prices, aiding affordability.”


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