With almost 67,000 mortgages approved in January, 2019 has started strongly for the property market. Despite fears for the housing market this year, this represents an increase in activity from the end of 2018, showing that 2019 could surprise many when it comes to the upward trend in property.
“January’s rise in mortgage approvals is at odds with recent data and surveys which had suggested that Brexit and economic uncertainty could be having a dampening effect on housing market activity,” said Howard Archer, chief economic advisor to the EY Item Club.
The surprise seen amongst analysts indicates that the upsurge in activity is unexpected, but there are several factors that are contributing to the market’s current health. A major contributor is, of course, low interest rates in the market, which have supported purchasers and given the lending industry much confidence. Many current property owners have used these historically low levels in order to refinance their loans and find a better deal.
The emergence of first-time buyers as one of the major forces in the property market is another contributing feature to this unexpected upsurge, as well as the increase in mortgage applications, as for the first time since 1995 first-time buyer mortgages made up over half of mortgages approved in 2018.
The strength of the first-time buyer market in 2019 can be seen in the 25,000 mortgages taken out in the first month of 2019 by first-time buyers, according to banking trade body UK Finance. A total of 33,621 mortgages were approved to purchase a home last month, according to data from UK Finance which represents high street banks and building societies. This also represents an increase when compared to February 2018 of 1.8% - which is fairly significant considering the march towards Brexit was firmly taking place through February.
With summer firmly established as the most popular time to buy and sell, we are moving into a particularly busy time of the year for property and therefore, this resurgent health of the market should continue for the foreseeable future.
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