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26 October 2016
Doug Crawford, CEO of My Home Move, comments on today’s BBA figures on high street bank mortgage lending figures for September
“There has been a lot of doom and gloom about the housing market, but there are rays of light in today’s BBA lending figures. Looking at 2016 to date compared to the same period in 2015, approvals are down only 4% and 2015 was an unusually busy year.* Going back one step, further mortgage approvals this year have closely tracked those of 2014, with the only exception being July – the immediate aftermath of the Brexit referendum result. (see chart below)
“Some commentators have fallen into the trap of looking at the year-on-year double digit decline in new lending in September and rushed to the conclusion that the housing market is underperforming. But simplistic comparisons mask a very complicated picture. The reality of recent years, is that it is not clear what ‘normal’ looks like when trying to benchmark the performance of the housing market. Taking a broader perspective and looking at the first nine months of the previous two years reveals that the number of approvals is only slightly behind 2015 and 2014 – which were both incredibly strong years for housing sales.
“While the performance this highlights might not be spectacular, it is steady and reassuring – especially in the context of the shock caused by the Brexit referendum result and the forecasts of many that the housing market would freeze to a standstill. Instead, we are seeing people getting on with their everyday lives including buying new homes to live in.
“At its core, the housing market faces the same issues of undersupply that it has done for years. In the medium to long term, strong fundamentals will continue to drive a prosperous housing market as consumers get on with their everyday lives.”
Number of home loans approved for house purchase, Jan – Sept 2014-16