BBA: UK housing market continues to cool

According to figures released from the BBA, gross mortgage borrowing of £10.6 billion was 7% higher than in September last year.

Related topics:  Mortgages
Rozi Jones
30th October 2014
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However, approval processes were temporarily disrupted by the implementation of the Mortgage Market Review earlier this year. At the same time, overall approval numbers have slowed over the year to September, with house purchase approvals down 10 per cent and re-mortgaging down 24 per cent.

Richard Woolhouse, Chief Economist at the BBA, said:

"A year ago there were many of us who were concerned by the heady pace of property price rises. The figures suggest we are now experiencing a steadier housing market, and that’s no bad thing.”

According to the data, September’s average loan returned to £157,700, a level that had been last seen in February, when the figure stood at £157,400.

The overall mortgage stock also continues to rise, despite some moderation in demand, and is 1.5 per cent higher year-on-year.

Brian Murphy, Head of Lending at Mortgage Advice Bureau (MAB), says that conditions are still favourable:

"Along with new affordability measures, the traditional summer slowdown is clearly a factor behind the lower number of mortgage approvals for September in today’s BBA figures. Judging from the flurry of product launches in recent weeks, lenders’ appetite for business remains strong and the potential delay of a base rate rise until summer 2015 suggests borrowers will continue to have their pick of low interest rate deals.
 
“As a result, we have already seen application numbers pick up during September as potential buyers return from holiday and focus their minds on making a move. The recent debate over interest rates will also have alerted many existing owners to the fact that better deals may be available to them, if not immediately then in the near future, and re-mortgage applications are continuing to set the pace.
 
“Given there were some concerns over the future direction of the market earlier this year, the fact that September’s average loan has returned to a level (£157,700) last seen in February (£157,400) – and consistent with the average for the second half of 2013 (£157,450) – is a welcome sign that measured lending decisions are being made with clear heads.”

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