RESIDENTIAL mortgage lending dipped in January, as economic uncertainty in the lead-up to Brexit made buyers and sellers cautious.
UK Finance household lending and deposits data revealed that gross mortgage lending across the residential market in January 2019 was £21.6bn, 1.5 per cent lower than the same month the previous year, while remortgage approvals were 3.1 per cent lower.
“This dip in lending is unquestionably linked to homeowners and landlords putting off the decision to put their property on the market,” said John Goodall, chief executive of peer-to-peer property lender Landbay.
“This ‘wait and see’ approach, entirely understandable in the current economic climate, is exacerbating the chronic undersupply of available housing.
“The current stalemate means that it falls to landlords, both private and institutional, to pick up the pieces and provide quality housing for those who would be buyers in more normal economic conditions.”
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Dilpreet Bhagrath, mortgage expert at online mortgage broker Trussle, added those hoping to move seem most affected by the current climate.
“It’s clear that current economic uncertainty is casting a shadow over the property market,” he said. “Remortgaging activity is also down slightly, but is continuing to tick over as expected as many homeowners seek to lock in a fixed-rate deal with a view to riding out any potential rate rises linked to Brexit.
“The ongoing shortage of available homes is limiting options for buyers in some areas, but there are some good deals to be had particularly for first-time buyers who are ready to move quickly.”
Meanwhile, other figures released on Tuesday showed that homebuyers have taken out more than £10bn in Help to Buy equity loans from the government. Between the launch of the scheme in April 2013 and Q3 2018, Help to Buy equity loans totalling £10.7bn have been used to fund 195,219 property purchases, official figures reveal. The value of properties bought under the scheme is almost £50bn, and the mean equity loan size was £54,630, while the mean property price was £255,542.
The maximum allowed equity loan for London properties increased from 20 per cent to 40 per cent in 2016, and since then there have been more than 10,000 completions, of which more than 9,000 were made with an equity loan higher than 20 per cent.
The government announced in October that Help to Buy will only be available first-time buyers from 2021. There will also be regional price caps from 2021 before Help To Buy finally closes in 2023.