The number of mortgage approvals for home movers hit the highest level for nine months in July.
UK Finance data shows that the number of home mover mortgage approvals in July increased by 1.4% annually to 32,710 – the highest figure since last November.
First-time buyer approvals were up 5.8% annually to 32,640.
The value of both first-time buyer and home mover mortgages was also at the highest level so far in 2019, at £5.7bn and £7.5bn respectively.
The number of buy-to-let mortgage approvals increased by 5.5% annually to 5,800.
However, the number of remortgage approvals fell, which was attributed to a drop in fixed rate deals coming to an end and more borrowers using product transfers instead.
The latest data also shows a disparity remains with HMRC figures that suggest transactions are dropping.
Mike Scott, chief property analyst at Yopa, said: “These figures are still difficult to reconcile with HMRC’s numbers for the total number of home sales completing in the month, which was reported as a 12.4% decrease for July, compared with July 2018.
“The HMRC figure is provisional, and the numbers for earlier months have been revised upwards as more data has come in, so we expect that the July figure will also increase.
“It also seems likely that the number of cash buyers is decreasing due to the current political and economic uncertainty, and the increase in mortgages is not completely filling the gap. If so, then we will likely see a surge in the number of homes sold if and when the Brexit uncertainty comes to an end.
“We therefore expect that the overall number of homes sold in 2019 will be much the same as in the preceding years, despite the uncertainty.
“However, there could still be a slowdown in the last quarter of the year as the next Brexit deadline approaches, which would cause the total number for the year to be a few percent behind last year’s figure.”
The discrepancy is quite simple really. There is less “cash” about, particularly investors, and therefore there are more mortgage buyers in the market as more and more agents are “forced” to sell to people who need a mortgage, instead of winging properties over to the local cash investor which every agent had in their CRM system.
You know the sort, every negotiator on the planet has at least one they contact first whenever their lister comes back with a new instruction…… “I’ll get Fred Investor in there immediately to make a cash offer!” Nothing wrong with Fred of course, but now that the cash has dried up for Fred because his massively over inflated flip job is sat on the market not selling, and because the new listings where he can offer 20% undervalue and buy a steal before spending £3k on a B&Q kitchen and marketing for £80k more than what he paid for it aren’t around, it means that in certain markets, heaven forbid, some agents are having to offer properties to people who, whisper it, need a mor.……… mortg……….. mortga……….. I can’t even bring myself to say it, how terrible! It won’t complete if they have a mortgage, cash is king etc etc etc!
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