Data from the Bank of England shows mortgage approval numbers have reduced confirming a slowdown in the housing market.
The housing market is slowing with the number of mortgage approved in August was 64,212 reducing from 66,100 in July and 66,923 in June.
Lending to first time buyers and home movers is lower in August as house prices reach new highs this year. The number of mortgage loans are only 0.9% higher than this time last year.
The Bank of England data follows an announcement that lenders are to be restricted from allocating more than 15% of mortgage business to anyone borrowing a multiple of four and a half times their income.
UK house prices begin to fall
House prices have reduced by 0.2% in September according to new data from the Nationwide for the first time since April 2013.
The reduction in house prices is good news if you are a first time buyer as you would require a lower deposit or smaller mortgage to get on the property ladder.
Average prices in the UK are £188,374 reducing from £189,306 in August but remain above the £172,000 average this time last year.
The average price in London is £401,072 which is 31% higher than prices in 2007 compared to the 1% for prices across the country excluding London.
There are large differences throughout the capital with the borough of Camden increasing by 42% with average prices of £884,000 compared to its neighbour Brent rising by only 12%.
Remortgages still buoyant
Even though the number of mortgage approvals overall has declined, remortgage buyers have been taking advantage of lower fixed rates.
The number of remortgage buyer approvals remained high at 32,273 in August compared to the six month average of 31,978.
This is in contrast to the slowdown in new purchases for buy-to-let investors after changes to stamp duty tax and taxation allowance on mortgage interest introduced over 4 years from April 2017.
For older homeowners there is higher activity with equity release mortgage buyers accessing cash in their property to consolidate debt, pay for care at home or pay university fees for grandchildren.
Mark Carney of the Bank of England has warned that interest rates will rise if housing prices continue to increase and borrowers have been taking the opportunity to switch from variable rate to fixed rate mortgages.
There are some particularly good value five year fixed rate mortgage available, however, with the threat to rising interest rates the lenders are likely to start raising the cost of these offers.
What are your next steps?
Talk to our London City Mortgage brokers for advice if you remortgage your existing home and want the best mortgage deal or release capital, buying your first home, moving home or are a buy-to-let investor.
Learn more by using the equity release calculator, mortgage cost calculators, and property value tracker chart. Start with a free mortgage quote or call us and we can take your details.
For older homeowners releasing equity from your property, our LCM mortgage advisers can recommend the lifetime mortgage, accessing wealth to maintain your lifestyle or even reduce inheritance tax owed by your beneficiaries.
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