MABs National Mortgage Index - February 2018

Market ‘ticks over nicely’ in January

January saw a slow but steady start to 2018, which was both in line with normal seasonal expectations, but also many industry predictions in terms of how the UK property market will perform this year.

We saw a solid month overall with annual house price growth still evident, albeit at a modest level, which correlates with reports from other indices, such as Halifax and Rightmove, also pointing to subdued but discernible annual increase in house prices. Transaction volumes were also encouraging, with HMRC reporting that the level of properties sold in January 2018 was broadly similar to those in January 2017, underscoring that it was very much ‘business as usual’.

On a regional basis, topline data for East of England & Norwich is as follows:

Stephen Alger of Mortgage Advice Bureau in Norwich comments:

“January was our busiest ever month, which we believe is reflective of the current buoyant local market.  There were a lot of people looking to move, both First Time Buyers and existing homeowners wanting to trade up, however we also assisted a significant number of clients who wanted to remortgage.  Not only that, but we saw more first appointments last month than ever before, which suggests to us that a lot of people were getting their finances in place to buy in the not too distant future.

With regards our customers who were purchasing, quite a few of our First Time Buyers were still unaware of the Stamp Duty changes, which meant a pleasant surprise when our advisers explained the new measures to them!   On a more general note, rates are so competitively priced now that when our advisers were researching the best products for clients last month, they were able to get nearly as good a deal using a lower deposit, for example a 90% mortgage, as was available with a bigger deposit, for example an 80% mortgage.  This meant that buyers were able to take advantage of these products and use their cash or savings pot for moving and renovation costs, rather than having to put it all into their purchase.   

We also noticed that quite a few of our landlord clients came back to the market in January, as they were actively seeking to add to their portfolios.  We’d suggest that this is reflective of the ongoing demand for rental properties in the area, and that good rental yields are still available, providing landlords have a sound financial planning strategy in place.

On the remortgaging side, we definitely saw a shift towards five year fixed rates, and certainly a significant increase on January 2017 when predominantly clients preferred two year fixes.  This is because there is now so little difference in cost between two year and five year fix products, many clients prefer the longer term financial security for the very small amount of additional monthly cost involved.

Overall, house prices locally are still increasing slightly due to lack of available properties, with buyer demand also still very evident.  Hopefully, with Spring just around the corner, more sellers may be tempted to list their properties over the next few weeks, as certainly the market is there for those who price realistically.”

 To read the full National Mortgage Index report, click here.