Active mortgage market as approvals hit two-year high

Springtime cheer and a delay to Britain’s departure from the European Union has helped the UK property market regain some momentum with the number of mortgage approvals reaching their highest levels in two years.

Data from trade association UK Finance has indicated just under 43,000 mortgages were approved by lenders in April, up 6% on March and 11.5% higher than at the same time last year. 

The remortgaging market also saw a similar increase in activity, with a 5% rise in approvals month-to-month and 11% increase on an annual comparison basis. 

A combination of record employment levels, continued low-interest rates and a shortage of available stock, combined with a brief Brexit interlude have all been noted as factors supporting the recent property market uplift. 

Former residential chairman at RICS, Jeremy Leaf commented that: “Home purchase approvals, which are the most important element of these figures, were strongly higher in April but reflect a rather up and down period for the market.

“Nevertheless, it is a positive and once again demand proves to be more resilient, which it should be at this time of year.”

First-time buyers and Help to Buy schemes supporting growth

One of the buyer groups credited with helping drive activity in the property market has been first-time buyers, spurred on by initiatives such as Help to Buy and the widespread adoption of 5% mortgages on the high street and by building societies. 

Data from e-surv at the start of 2019 highlighted a national picture where 27% of all mortgage approvals were done so with a small deposit, indicative of first-time buyers, including high-growth regions such as Yorkshire and The Humber and the North West too.

Read more: First-time buyers sparking early-year market growth

In fact, in towns such as Slough and Swindon, over half of all new-build property sales have been completed via a Help to Buy scheme. 

In Swindon alone, over 60% of new homes purchased made use of the government scheme last year in a trend that’s reflected nationwide with 52,000 of the 100,400 new homes bought in 2018 in England making use of the equity loan scheme.