What’s really going on in the housing market?

It seems that one week there are figures released that show lending is robust and sales are steady, the next they are falling, or expected to fall, with double-digit drops announced this week.

The latest June lending figures from UK Finance also send a mixed message.

Gross mortgage lending in June was down a significant 4% on the same month in 2018, with £21.9bn lent to borrowers.

Remortgage approvals were 1.4 per cent lower than June 2018 and approvals for other secured borrowing were 5.3 per cent lower down year-on-year.

It sounds pretty gloomy, but it wasn’t all bad news.

Purchase pick-up

The number of mortgages for home purchase approved by the main high street banks in June 2019 was 2.9 per cent higher than in the same month in 2018, said UK Finance.

This could suggest the market is picking up and that these approvals will feed through to increased transctions in the coming months. In other words the market has turned a corner.

Managing director of One 77 Mortgages, Alastair McKee, said: “We’ve seen the number of residential property transactions fall yet again this week, but this fresh influx of buyer activity should help to reverse this negative trend as the months go on.”

Tim Waterlow, development director of Responsible Lending, added: “A healthy jump in mortgage approvals for home purchase is at odds with the pronounced fall in transaction volumes seen lately.

“HMRC revealed this week that it had recorded an annual fall in residential sales of more than 16%. That was a staggering drop but these more sprightly lending statistics could spell some light at the end of the tunnel.”

Of course, we still have the Boris and Brexit factors to consider when it comes to the future direction of the housing market (and wider economy), and we are unlikely to have any clarity on the UK’s withdrawal from the EU until at least Halloween.