November 4th, 2014
The UK housing market is continuing to lose momentum, according to the latest House Price Index conducted by Nationwide Building Society.
October’s survey shows a reduction in housing price growth from September, taking the average house price to £189,333.
“A variety of indicators suggest that the market has lost momentum. The number of mortgages approved for house purchase in September was almost 20% below the level prevailing at the start of the year” said Robert Gardner, Nationwide Chief Economist.
“The annual pace of house price growth continued to moderate in October, declining to 9% from 9.4% in September, the second consecutive month where annual growth has fallen. This is despite house prices increasing by 0.5% month on month in October.”
The reason for the market beginning to stagnate could be further knock on effects of April’s Mortgage Market Review, according to one industry expert.
“We saw last week with mortgage approval levels falling that the property market is starting to lose its ‘edge’” said Taj Kang, director of leading niche-broker Contractor Mortgages Made Easy. “I would suggest that this is another knock on effect of MMR, as it’s very likely that some of the more problematic applications are finally working their way out of the lender’s application processes.”
“Lenders are beginning to worry. Earlier in the year things were looking rosy again for banks, with lending levels hitting heights not seen since the 2008 credit crunch. Now though, with rates being slashed across the board, lenders are scrambling to hit aggressive lending targets before year-end.”
Several banks have announced reductions in mortgage rates, and this week both Barclays and Yorkshire Building Society have followed suit, slashing higher-risk category mortgage pricing.
Barclays will introduce lower rates for borrowers with a 10% deposit on Tuesday, along with reviewing their ‘Help to Buy’ range; and Yorkshire Building Society are reviewing their own rates offered to those with a 5% deposit.
“As we approach the end of the year, many lenders are behind on their business targets in certain areas. It appears that the ‘high risk’ lending areas with a lower deposit are the areas in which they could do more, from the look of the rates being released of late” said Taj.
“This means that in the coming winter months, there could be some exceptional value on offer to those who meet lender criteria and are ready to act quickly. Contact a broker and watch this space; you could well find the perfect mortgage.”
Article By: Mark McBurney, Senior Mortgage Consultant at Contractor Mortgages Made Easy
Media Contact: Raman Kaur, Public Relations Manager
Tel: 01489 555 080