Fears rise over the future of the market as mortgage approvals fall
According to the trading body UK Finance, mortgage approvals across the UK have hit their lowest level in 13 months – sparking fears that the housing market could be headed for a sharp decline.
In his Autumn Budget, the chancellor stated that the Tory-led government would be taking steps to encourage new buyers to join the property market by eliminating stamp duty on house purchases below £300,000, as well as investing further in the Help-to-Buy scheme.
New figures, however, have shown that mortgage approvals are in a state of freefall, with only 40,488 accepted in October – the lowest number since September 2016. And many believe this trend is unlikely to change due to the Bank of England’s decision to raise interest rates at the beginning of November.
While there are hopes that the changes made in the Budget will stimulate the market, it seems that consumers are instead choosing not to commit to large purchases. In a similar vein, reports are also claiming that Christmas high-street sales are expected to hit a new low as the British public continue to turn away from unnecessary expenditure.
While some experts blame the lack of activity on the volatile political landscape amid concerns that Brexit negotiations will leave the country in a state of limbo come 2019, many others believe that these trends are simply a sign of a greater economic downturn as consumers redirect their available funds towards continually increasing living costs.
For home owners, the news is not quite as depressing, with analysts claiming that a lack of stamp duty tax will actually drive house prices up. However, those who wish to sell their home fast are being warned that many potential buyers will lack the financial clout to afford the former’s asking prices – further damaging the market.
“This appears to be just the start of a bigger downturn,” said Samuel Tombs, the chief UK economist at consultancy Pantheon Macroeconomics.
“Housing market activity likely has cooled further in recent weeks, given that mortgage rates have moved swiftly higher and consumer confidence has weakened since the hike by the Bank of England’s monetary policy committee.”
Combined with the fall in credit card lending to just 5.1% in October – down 0.4% from the previous month – these factors paint a worrying picture for the future of the UK economy.
It is therefore understandable why many homeowners have chosen to re-mortgage their homes as opposed to attempting a sale and losing money. Luckily, for those who need to sell in a short time frame, companies such as National Homebuyers will always be happy to buy houses for cash at competitive prices.
Need to sell but can’t find a buyer? Why not ask National Homebuyers for advice, as we buy any house. Call 08000 443 911 or request a call back to find out how much you could get for your property.