Mortgage approvals fall amid slowing house prices

Mortgage approvals fall amid slowing house prices

Mortgage approvals have fallen and house prices have slowed their growth year-on-year, as Yorkshire becomes the best place to be a first-time buyer, according to the latest housing data.

The Yorkshire market is the most attractive for first-time buyers and others with small deposits. By contrast, London continues to be the toughest market for this group, the latest Mortgage Monitor from residential chartered surveyors e.surv shows.

Across the UK, there were 66,614 mortgages approved (seasonally adjusted) during March 2018.

This is 4.2 per cent higher than February, but lower by 1.3 per cent on the figure recorded a year ago.

With further speculation that the Bank of England base rate will rise again in the next few months, the summer months could see strong activity as more homeowners look to remortgage and secure a low rate, e.surv said.

According to Richard Sexton, director at e.surv, many borrowers are fixing their rate and protecting themselves against future rises.

He said: “This has contributed to the growth in the mortgage market compared to last month.

“While the proportion of loans being given to first-time buyers has declined month on month, this month’s data shows the overall market is in a much stronger position than at the end of 2017.”

According to Your Move’s latest England & Wales House Price Index, published today (16 April), the rate of annual house price growth slowed for the tenth successive month in March to 0.7 per cent.

This figure compares to 5.1 per cent a year ago.

The average house price in England and Wales is now £301,490, up £130 on a month earlier and £1,985 up on a year ago.

The market remains starkly divided, however, with prices falling in London and the South East but continuing to grow elsewhere.

However, six out of the ten regions have recently set new peak average prices.

According to Oliver Blake, managing director of Your Move and Reeds Rains estate agents, “the slowdown in London and the South East is now well established”.

He said: “Yet the performance of many of our key cities and regions elsewhere shows that there’s still life in the market yet.”

The market has significantly slowed since its peak in February 2016, when house prices were growing at 9 per cent annually, but the slowdown is much more pronounced in London and the South East than elsewhere.

Excluding those two regions, the rest of England and Wales has seen prices grow at a more solid 2.6 per cent, and other cities continue to power on, such as Bristol, with 8.4 per cent annual growth.