Source: The Express
PROPERTY, mortgage loans, house prices and the UK housing market and how they would be affected after the General Election in June was at the forefront of many house buyers minds. But new data from Mortgage Advice Bureau reveals the real impact.
Despite the political whirlwind over the last few months with the General Election, there has been little movement in the UK housing market, according to Mortgage Advice Bureau’s latest data.
And Average First Time Buyer property purchase price was mostly unchanged on May 17 with 0.8 per cent increase.
Brian Murphy, Head of Lending Mortgage Advice Bureau, said what they’ve observed from the data for June is the market held up well and mostly showed no sign of a slow-down int terms of consumer appetite for mortgages – either to purchase or to remortgage.
He added: “Clearly, consumers are making decisions based on their individual circumstances and generally seem not to be taking any notice of what goes on in the headlines, or at least taking them with a hearty pinch of salt.
“The reality is, for most of those moving currently, it’s not a discretionary decision; there are lifestyle drivers which are forcing them to move. For example a growing family or a need to relocate to get children into a certain school or due to a new job.
“In these circumstances, regardless of political or economic climate there is a need to move home, and that is driving activity, rather than a sentiment-based market which we’ve seen in previous years where buying decisions are fuelled by a desire to ‘not miss out’ if hours prices are on the increase.
“It’s a very difficult buying process now, and those who are currently transacting are, in the main, motivated due to circumstance and not speculation.”
The ongoing imbalance of stock versus demand in many area of the country, together with mortgage rates close to historic lows have meant what could have been a fallow month for UK property was actually one of the busiest months of the year so far, according to residential property transactions in June noted by HMRC.
Brian said: “While the majority of these deals will have been started before the start of the month, doubtless most would have been instigated post the Election being called on April 18, which further evidences the fact that UK consumers are apathetic to political conjecture because, frankly, it makes little difference in reality to their day to day decision making process.”
But the Mortgage Advice Bureau can not predict at this point in time what the full impact of the election and its outcome has had.
Brian added: “There are some signs of softening home mover activity, however, in terms of the levels of people who’ve applied for a mortgage since the election, either in terms of buying a home or remortgaging an existing one, the immediate evidence points to current market momentum being maintained, which is encouraging in tempers of the start to the second half of 2017.”
London, the North East, the North West, Wales and the South West did show a decrease from the previous month in Mortgage Advice Bureau’s Regional Purchase Loan Analysis.
Louisa Fletcher, Property Expert, explained: “The figures from Mortgage Advice Bureau overall reflect a generally steady picture, although some parts of the UK saw prices cooling last month. That’s to be expected, given that in Greater London for example, there is an increased sensitivity to economic and political factors, mainly due to the potential impact on employment in certain sectors, which of course in turn has a knock on impact with regards property decisions for those living and working in the Capital.
“In other areas, for example the North East, a slight cooling in prices is more likely indicative of the fact that potential buyers are doing their legwork and ensuring that they have a mortgage agreement in principle in place before they start their property search, meaning they are aware of their upper limit in advance and therefore are negotiating within their budget, rather than stretching to meet asking price.
“A slight reduction in asking prices isn’t necessarily a bad thing, as it will help to enable affordability. However it would appear from this latest set of data it would appear that, overall, the market is ticking over for now, although of course it will take a few months for the data to reflect any major changes in direction of travel in terms of house prices as a consequence of the Election result and ongoing Brexit negotiations.”