Gloomy mortgage data may mark ‘start of housing slowdown’ says agent

Agents have reacted gloomily to the release of figures showing that the number of new mortgages offered to both movers and first time buyers fell substantially in March.

New first-time buyer mortgages numbered 28,800 in that month, 2.4 per cent fewer than in the same month a year earlier.

The number of new mortgages going to those moving house fell six per cent to 25,280.

The figures come from mortgage trade body UK Finance.

Mike Scott, chief property analyst at online estate agent Yopa, says the figures show “the first sign of a slowdown in housing market activity” which had been holding up well despite the current political and economic uncertainty. 

“It remains to be seen if this is a one-off pause in home-buying activity caused by the short-term uncertainty of the Brexit deadlines on March 29 and then on April 12, or if it is the start of a longer-term trend” he says.

“Since the economic fundamentals remain sound, with high employment, rising wages and active mortgage lending at low interest rates, we expect that the market will quickly return to normal, at least until October when the new Brexit deadline comes close, and that the total number of homes bought and sold in 2019 will be at a similar level to the previous five years” suggests Scott.

Meanwhile Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “These numbers … reflect what we are seeing at the coalface - in other words, it is a bit busier one month but down the next and then up again. There are no significant movements one way or the other. We are continuing to see more buyer interest but properties must show real value and opportunity otherwise they are getting left on the shelf.”

The UK Finance figures also show a hefty drop in buy to let activity. 

There were just 5,000 buy to let home purchase mortgages completed in March 2019, 9.1 per cent fewer than in the same month in 2018; meanwhile there were 14,400 remortgages in the BTL sector, 3.9 per cent more than in March 2018.

Jeremy Leaf comments: “It is no surprise that buy to let mortgages are continuing their downwards trend as landlords face an onslaught of tax and regulatory changes with more on the way. We are finding buy to let remortgaging increasing is down to properties having to work harder in order to maintain profit levels so this is likely to continue.”