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UK Property Market Post Brexit Decision

Recent research conducted by Which? Mortgage Advisers has given an interesting insight into the state of the UK property market 100 days after the Brexit decision.

According to the researchers, the picture is a positive one, with stable house prices and cheaper mortgage rates on offer to both first-time buyers and remortgagers.

Mortgage Availability

The study found that there has been a 13% increase in the number of mortgages on the market in the 100 days following the Brexit decision. At the end of September there were 5,366 mortgage deals available, compared with 4,736 in June.

In addition, the mortgage deals on offer have become cheaper as a result of the Bank of England’s decision to cut the base rate in August. Researchers found that the average mortgage rate on offer fell from 2.99% at the start of June to 2.85% at the end of September.

Stable House Prices

When the researchers looked at house prices they found an equally positive picture, with prices apparently remaining relatively stable at a national level and increasing by an average of 1.79% (from £211,231 to £215,008) between June and August.

The study also looked at the position of different categories of mortgage applicants, and found that:

  • First-time buyers: At the end of September there were 245 deals available to first-time buyers with 5% deposits, seven more than in June. The number of 80% mortgages available to first-time buyers increased from 516 in June to 609.
  • First-time buyer mortgages: The interest rate on 95% mortgages for first-time buyers has dropped by 0.13 percentage points to 4.14% since the Brexit vote. The average first-time buyer rate on an 80% mortgage has decreased by 0.1 percentage points to 2.84%.
  • Remortgaging: Homeowners looking to remortgage are also seeing more and better deals made available to them. The number of 60% mortgages available to remortgagers increased from 345 in June to 421 in September, and the average rate decreased by 0.07 percentage points to 2.23%.

CML Figures

These findings are in line with recent analysis from the Council of Mortgage Lenders (CML), which showed that gross mortgage lending reached £22.5 billion in August - 7% higher than July’s lending total of £21.1 billion.

“Widely voiced fears in recent months about the housing market have proved to be wide of the mark,” commented CML senior economist Mohammad Jamei. “Prospects for house purchase activity post-referendum look slightly subdued, when compared to late 2015 and early 2016. However, sentiment in the market recovered in August. This is reflected in stronger-than-expected transaction figures, and in our gross lending estimate.”

“This recovery in sentiment is likely to be down to a number of different factors, including the Bank of England’s monetary stimulus and its introduction of the Term Funding Scheme in August,” he added. “A subsequent uptick in approvals is anticipated, albeit still at levels lower than earlier this year as affordability constraints and lack of properties on the market for sale continue to bear down on borrowers.”

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