Figures released by the Bank of England, show that for
the first half of 2016, £128.73bn was lent by UK banks to buy UK property - impressive
when you consider only £106.7bn was lent in the first half of 2015. Even more
interesting, was that most of the difference was in Q2, as £68.12bn was lent by
UK banks in new mortgages for house purchase, which is the
highest it has been for two years. Looking locally, in Warminster at the last quarter,
£346.1m was loaned on BA12 properties alone!
Even though the Bank won’t be releasing the Q3 figures until
December 2016, as I discussed a few weeks ago, HMRC have published their own
preliminary data to suggest Q3 will be even better, with a massive growth of
buy-to-let landlords to the housing market in that time frame. Fascinating, as
it seems to fly in the face of the popular narrative – that the uncertainty
surrounding Brexit would negatively impact buyer sentiment.
And it’s not just buy-to-let landlords that seem to be
flourishing. I am finding that first-time buyers are also a lot more confident
too. Low, and now negative, inflation has had a tangible impact on household
finances and first-time buyers feel more secure in their jobs. Couple with a
low interest rate environment and you have all the ingredients for a
strengthening property market. To back that up with numbers, of the
£68.12bn of mortgages lent in the Quarter (Q2), £14.9bn was lent to first-time
buyers (the highest proportion of that overall lending for over two years at
21.99%).
When I looked at the data for Wiltshire Council area, the
average price paid by first-time buyers (FTB’S) was £200,834, which is a drop
of 0.41% from last month but a rise of 9.40% to twelve months ago. The Land
Registry then categorise the remaining buyers into cash buyers or those buying
with a mortgage. The average price paid by cash buyers was £244,735, a drop of 0.54%
from last month but a rise of 9.19% to twelve months ago, whilst buyers with
mortgages (but not FTB’s), the average price paid by them was £255,962, again a
drop of 0.52% from last month with a rise of 9.30% to twelve months ago.
What surprised me with these figures was how close the
property prices, values and percentages were to each other. It just goes to
show the combination of low mortgage rates and a stable job market will
continue to have a positive effect on the Warminster and UK market. And that is why, while there is undoubtedly
more cautiousness in the market at present than a year or so ago (among
borrowers and mortgage companies alike) - mortgage rates are so competitive
that they are inducing people to commit to a home purchase.
It seems the great Brexit uncertainty was over hyped, and
house price growth as well as mortgage approvals, could pick up pace into 2017.
