What does the latest mortgage trend data mean for you?

We take a look at the latest mortgage approvals data, as well as current house price trends to see what this could mean for affordability across the market now and in the future.

What does the latest mortgage trend data mean for you_

The Bank of England’s latest Money and Credit statistics have confirmed there was a decrease in mortgage approvals in February compared to January. February’s figures saw a slight decline at 71,000 down from 73,800 in January[1].

However, approvals are still above the 12-month pre-pandemic average up to February 2020 of 66,700.

Rise in remortgage approvals seen

Approvals to remortgage with a different lender rose to 48,200 in February. The increase might suggest a rush to fix a new deal following February’s announcement by the Monetary Policy Committee (MPC) that the Bank Rate will rise from 0.25% to 0.5%[2]. Since then, there has been a subsequent 0.25% rise in March.

Despite the increase in remortgage approvals seen in February this year, this figure remains lower than the 12-month pre-pandemic average to February 2020 of 49,500.

House price trend continues upwards

The data comes as Zoopla recently announced that house prices rose an average of 8.1% in the 12 months to February this year[3]. This is a slight drop from January’s figure of 8.4% but almost double compared to the 4.2% figure released in February last year.  

The reason for the continuing upward trend in house prices is down to demand continuing to outstrip supply. Pressure on the market eased slightly in January but it seems that the influence of the pandemic, such as shifting working patterns and changing local economic conditions, has stuck around. Homeowners seem to be looking to take advantage of rising prices, triggering house moves.

Location and affordability

The rate of growth in house prices is variable across the country according to Zoopla’s recent data. Average rises of 11.8% have been seen in Wales, compared to 3.2% in London.

Despite these gains, Wales is still seen as one of the most affordable markets in the country. In London the average home is still 11 times that of the average income.  The smaller increase in growth in London does reflect that the affordability level has improved, although it’s still above the rest of the country[3].

It’s also been reported that the biggest price increases have been seen in areas where the demand is highest versus lower average prices[3].

Will price growth slow down?

It’s likely that house prices will stabilise as the year goes on. This may come down to pressure felt by households as the cost of living continues to increase. Economic uncertainty persists both in the UK and globally. This can be attributed to Russia’s invasion of Ukraine and the continuing pandemic recovery.

It’s also likely that interest rates will rise again to combat increasing inflation, further adding to costs for those on tracker or Standard Variable Rate (SVR) mortgages.

Looking to discuss your mortgage deal or get on the property ladder? Our B Mortgage Services Advisers are on hand to guide you through any questions you may have. Get in touch with them today to see how they could help you.

Brunsdon Financial is not responsible for the content of third-party web sites.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Source 1, Source 2, Source 3

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What does the latest mortgage trend data mean for you_

What does the latest mortgage trend data mean for you?

We take a look at the latest mortgage approvals data, as well as current house price trends to see what this could mean for affordability across the market now and in the future.

The Bank of England’s latest Money and Credit statistics have confirmed there was a decrease in mortgage approvals in February compared to January. February’s figures saw a slight decline at 71,000 down from 73,800 in January[1].

However, approvals are still above the 12-month pre-pandemic average up to February 2020 of 66,700.

Rise in remortgage approvals seen

Approvals to remortgage with a different lender rose to 48,200 in February. The increase might suggest a rush to fix a new deal following February’s announcement by the Monetary Policy Committee (MPC) that the Bank Rate will rise from 0.25% to 0.5%[2]. Since then, there has been a subsequent 0.25% rise in March.

Despite the increase in remortgage approvals seen in February this year, this figure remains lower than the 12-month pre-pandemic average to February 2020 of 49,500.

House price trend continues upwards

The data comes as Zoopla recently announced that house prices rose an average of 8.1% in the 12 months to February this year[3]. This is a slight drop from January’s figure of 8.4% but almost double compared to the 4.2% figure released in February last year.  

The reason for the continuing upward trend in house prices is down to demand continuing to outstrip supply. Pressure on the market eased slightly in January but it seems that the influence of the pandemic, such as shifting working patterns and changing local economic conditions, has stuck around. Homeowners seem to be looking to take advantage of rising prices, triggering house moves.

Location and affordability

The rate of growth in house prices is variable across the country according to Zoopla’s recent data. Average rises of 11.8% have been seen in Wales, compared to 3.2% in London.

Despite these gains, Wales is still seen as one of the most affordable markets in the country. In London the average home is still 11 times that of the average income.  The smaller increase in growth in London does reflect that the affordability level has improved, although it’s still above the rest of the country[3].

It’s also been reported that the biggest price increases have been seen in areas where the demand is highest versus lower average prices[3].

Will price growth slow down?

It’s likely that house prices will stabilise as the year goes on. This may come down to pressure felt by households as the cost of living continues to increase. Economic uncertainty persists both in the UK and globally. This can be attributed to Russia’s invasion of Ukraine and the continuing pandemic recovery.

It’s also likely that interest rates will rise again to combat increasing inflation, further adding to costs for those on tracker or Standard Variable Rate (SVR) mortgages.

Looking to discuss your mortgage deal or get on the property ladder? Our B Mortgage Services Advisers are on hand to guide you through any questions you may have. Get in touch with them today to see how they could help you.

Brunsdon Financial is not responsible for the content of third-party web sites.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Source 1, Source 2, Source 3

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