British house prices surged unexpectedly in October, countering signs of a broad slowdown in the housing market over the last six months, a survey from mortgage lender Halifax showed. House prices shot up 1.4 percent in October compared with an upwardly revised 0.3 percent increase in September. Economists had expected only a 0.2 percent rise. In the three months to October, house prices were 5.2 percent higher compared with the same period a year ago - again stronger than the consensus that pointed to a 4.8 percent rise. With the economy currently resilient, house prices may well rise modestly in the near term. UK economist believe housing market activity is likely to be increasingly pressurised in 2017 by heightened uncertainty constraining consumer confidence and willingness to engage in major transactions, as well as hampering economic activity.
The number of 90% and 95% LTV products have seen a "significant boost" in numbers over the past month, after falling slightly following the Referendum result. Data shows that the number of 90% LTV products has increased from 560 in August to 594 - the highest figure since 2008 There are now 95% LTV products available on the market, up from a low of 238 in August. Shortly after the EU referendum, the number of higher loan-to-value mortgages fell slightly, as providers quickly reassessed the risks of lending to borrowers with a smaller deposit and others worried that this was the start of a restriction of deals for first-time buyers.
After fifteen successive monthly increases, UK house prices were unchanged in October, according to the latest Nationwide house price index. As a result, the annual rate of house price growth slowed to 4.6%, from 5.3% in September. Nationwide's Chief Economist, said: “Measures of housing market activity remain fairly subdued, with the number of residential property transactions c10% below the levels recorded in the same period of 2015 in recent months. However, this weakness may still in part reflect the after-effects of the introduction stamp duty on second homes introduced in April, where buyers brought forward transactions to Q1 to avoid additional stamp duty liabilities. Policy changes impacting the buy-to-let market may also be playing a role in dampening activity.
September's mortgage approvals remained steady on a monthly basis but remained 14% lower than in 2015 as the industry finds its feet following the Referendum, according to e.surv. E.surv believes the UK mortgage market appears to have reached a ‘new normal’, as although approvals dropped dramatically in the immediate aftermath of the vote, the market rebounded in August and this level of activity has remained steady into September. Additionally, the proportion of loans made to borrowers with a deposit of less than 15% remains above the level seen a year ago. Some 17.9% of loans were made to borrowers with smaller deposits in September, higher than the 17.3% recorded in the same month last year, suggesting that first-time buyers are not bearing the brunt of lenders’ reduced activity.
Buying a home in a market town will cost you an average of £34,000 more than in neighbouring areas, with one in five costing an extra £100,000. According to research market towns have become more than 30% more expensive than they were ten years ago, and seven out of ten have prices above their county average. With MMB finance being based within Wiltshire Gloucestershire and Oxfordshire where we are well blessed with many market towns and villages. If you need expert local help and advice simply click here to find more about our mortgage range