Boom in mortgage activity to boost house prices

Growing numbers of mortgage applications in 2012 have helped to stabilise house prices, according to the latest National Mortgage Index from Mortgage Advice Bureau.

Related topics:  Mortgages
Millie Dyson
13th March 2012
Mortgages
Using data from more than 300 brokers and 700 estate agents across the UK, the National Mortgage Index found that mortgage activity has defied expectations made at the beginning of the year.

Applications defy expectations

Helped in part by the end of the Stamp Duty holiday for first-time buyers and also by concerns over increases to lenders’ SVRs, the number of mortgage applications in February was up 20.9% compared to January (where the number of applications was up 52.7% on December 2011).

Brian Murphy, head of lending at Mortgage Advice Bureau, comments:

“Activity among mortgage borrowers has ratcheted up further in February following a positive start to the year. The end of the Stamp Duty concession for first-time buyers had an impact on this but so has the increased availability of 95% mortgage deals.

“Looking forward, the Newbuy scheme should provide a stimulus to economic growth but it is not a panacea for the housing market and we still hope the Government will reconsider the decision to remove the Stamp Duty holiday.”

Buy to let boost

The National Mortgage Index also reports an increase in the amount of buy-to-let activity in the mortgage market, with the number of landlords applying for purchase loans up 30%, and by more than 44% cumulatively compared to February 2011.

Remortgage activity among landlords was also up, rising 34% compared to the same time last year and by more than 60% on a cumulative basis.

Brian Murphy comments:

“This increased activity suggests landlords are also taking advantage of greater choice and competition that now exists to secure better rates and to use equity from their existing properties in order to grow their portfolios.”
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