“Busy Autumn” for buyers: Mortgage Advice Bureau

The mortgage market is showing significant regional differences, according to the Mortgage Advice Bureau’s National Mortgage Index.

MAB data suggests that, outside of London and some areas in the South East, activity in October 2018 was consistent on previous months, with some areas seeing rising prices due to low stock levels not supporting buyer demand.

In October 2018, the average purchase loan stood at £170,799, hardly changed from September 2018 (£170,996) but slightly lower than October 2017 (£171,114).

Loan-to-values also remained mostly unchanged in October 2018, with the average LTV standing at 70.6 per cent, compared with 70.4 per cent in September 2018, but slightly higher than October 2017 (69.3 per cent).

According to MAB, the average purchase price in October 2018 was £242,035, broadly similar to September 2018 (£243,009), but a slight drop of 1.9 per cent on October 2017 (£246,782).

The figures also show the average remortgage loan in October 2018 was £172,616, a decrease of 1.4 per cent on September 2018 (£175,120), and also a drop of 2 per cent on October 2017.

Mortgage Advice Bureau head of lending Brian Murphy suggests that a continuation of the diverging market has led to some interesting outcomes.

He says: “For example average property purchase prices in Wales, the North East and East of England increased last month, but the average purchase loan size decreased. This leads us to conclude that those existing home movers who are moving up the ladder in these areas are perhaps seeing a net gain in terms of the value of the property they are selling, meaning that they are benefitting from more equity to take into their next purchase, and therefore borrowing slightly less to fund the transaction.

“Consumer confidence in bricks and mortar appeared to remain positive for the most part last month, as headline transaction levels remained at a healthy level in October with some of our regions reporting near-record months in terms of the number of clients both seeking purchase mortgages and completing their transactions. Data from HMRC in terms of residential transactions in October supports our findings, with the overall volume of properties sold increasing month-on-month and year-on-year.

“This in spite of ongoing political and economic uncertainty during the month, leaving us to conclude that those who are currently moving home have adopted the mindset that the time is right for their individual circumstances, therefore they will continue with their plans regardless of what’s being reported in the news.”

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