Mortgage market remains ‘steady’ in January: MAB

Houses, house, property, monopolyThe housing market enjoyed a “slow but steady” start to the year, with house prices rising year-on-year, according to the latest National Mortgage Index.

This data, compiled by Mortgage Advice Bureau, showed the average purchase price in January was £245,742 – a 0.8 per cent increase on the average price recorded in January last year.

However, this figure showed a 1.12 per cent decline when compared to December.

One of the key findings in this report showed that the average first-time buyer mortgage increased by 2.3 per cent in January, when compared to December’s figures.

The average first-time buyer loan was £129,917 in January compared to £126,826 in December.

However, other the average size of other types of mortgage declined over the month.

The average purchase loan stood at £172,990, a 0.5 per cent decline when compared to December figures. However this figure showed a modest year-on-year increase of 2.4 per cent.

The size of the average residential remortgage was £170,102. This was 1.6 per cent lower than December, and 0.9 per cent lower than January 2017.

Meanwhile, the average buy-to-let purchase loan stood at £129,917, an increase of 2.3 per cent on the month, although a slight 0.15 per cent decline year-on-year.

This housing data also shows the average age of applicants, which has remained unchanged, over the year.

The average first-time buyer is now 31. Looking at all house purchases the average buyer is 36, while the average age of a remortgage applicant is 42.

The average age of those taking out a buy-to-let loan is 45.

Mortgage Advice Bureau’s head of lending Brian Murphy says: “A slight month-on-month decrease in purchase price between December and January is absolutely within seasonal expectations, and reflects the fact that those who are actively buying and selling at the beginning of the year are likely to be in ‘negotiation mode’ to get the deal done.”

He adds: “We saw a solid month overall with annual house price growth still evident, albeit at a modest level.” This he says correlates with other market reports – such as the Halifax and Rightmove house prices indices – also pointing to a subdued but discernible annual increase in house prices.

MAB pointed out that transaction volumes also indicated that it was “business as usual”, with HMRC reporting that the level of properties sold in January 2018 was broadly similar to those in January 2017.

However, this Mortgage Advice Bureau shows first-time buyer activity was more evident in January.

Murphy says: “It’s highly like that the change in stamp duty in November last year has stimulated those who were considering getting on the ladder over the next year to perhaps start their search in earnest.” As part of that process he says many may be applying for mortgage finance to ascertain how much they are ale to borrow.

However, other data published by the National Association of Estate Agents this week showed that an upturn in demand in the housing market in January had led to a smaller proportion of sales going to first-time buyers.

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