Mortgage Market Briefing – December 2019

Further cuts to rates in December, especially for borrowers with small deposits, have proved a Christmas gift for first-time buyers.

Data compiled by financial analysts Moneyfacts found that the average two-year fixed-rate at 95% loan-to-value (LTV) fell from 3.27% in November to 3.25% in December.

Five-year mortgage deals also became cheaper in December, with the average rate falling from 3.6% to 3.57% when compared with November’s figure.

Additionally, the average two-year fix at 90% LTV dropped by 0.04% and the typical five-year deal fell by 0.02% month-on-month.

Lower mortgage rates are helping tempt existing homeowners and new buyers into the sector, yet customers may find vastly different markets depending on where they live.

Varied outlook for the housing industry

According to the most recent Your Move house price index, areas of the South of England saw house prices continue their downward trend again in October. Meanwhile, northern areas demonstrated strong growth in October, outstripping their southern counterparts.

Wales was home to the strongest annual price growth, with the typical property value increasing by 2.1% in the last 12 months to October.

The average house in Wales is now worth
£189,190. Close behind was the North West,
where 1.9% growth in the last year has left the average house price standing at £197,245, and
the North East, where prices rose by 1.5% to £163,084.

Parts of southern England saw prices fall back in the last year, although these regions still remain more expensive than northern areas.

In the East of England, the average house price fell by 1.6% in the year to October. The typical property in the region is now worth £325,919. Elsewhere, prices in the South East declined by 1.4% annually and now stand at £371,805.

The London market has continued its recent improvement as prices grew by a very modest 0.1% in the last 12 months, arresting a recent series of price falls. The average house in the capital is now worth £602,663.

Many would-be purchasers may have held off buying because of the uncertainty caused by the December general election. A report from the Royal Institution of Chartered Surveyors suggested that this pent-up demand could now be released following this month’s decisive election result.

Many sellers and buyers had been put off buying until the election was concluded and, after the usual Christmas slowdown, surveyors believe that the market will pick up at the start of the new year.

Equity Release: Market Update

The latest ‘Wealth in Great Britain’ report, published by the Office for National Statistics (ONS), showed that the value of property owned by Brits has increased from £4.49tn to £5.09tn between April 2016 and March 2018.

Unsurprisingly, older people tended to have greater property wealth than younger generations.

The study found that those aged between 35 and 44 had an average property wealth of £139,100, This figure increased to £189,400 for those aged between 45 and 54, £255,800 for ages 55 to 64, and £272,900 for people aged 65 and above.

Richard Sexton – Business Development Director, e.surv Chartered Surveyors

Sources:

https://moneyfacts.co.uk/news/mortgages/early-christmas-present-for-first-time-buyers-as-average-rates-fall/

http://www.acadata.co.uk/assets/uploads/2019/11/LSL-Acadata-EW-HPI-News-Release-October-19.pdf

https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/bulletins/totalwealthingreatbritain/april2016tomarch2018

https://www.rics.org/globalassets/rics-website/media/knowledge/research/market-surveys/rics-uk-residential- market-survey-november-2019.pdf

About e.surv

e.surv is the UK’s largest valuation provider, directly employing over 600 residential surveyors across the UK, supported by a network of consultant valuers. The business is the largest distributor and manager of valuation instructions in the UK and is appointed as Panel Manager for more than 20 mortgage lenders and other entities with interests in residential property. The business also provides a number of private survey products direct to the home-buying public. e.surv is a subsidiary of LSL Property Services plc. For further information, see www.www.esurv.co.uk.