Much recent evidence suggests the housing market is gathering pace after the lull caused by the financial crisis five years ago. With some regional exceptions, prices have been firmer and mortgage volumes have risen, with the emphasis on first-time buyers, their numbers recently about 40% higher than a year earlier according to the Council of Mortgage Lenders. First-timers helped others move upmarket and the CML also noted increased remortgage activity.
Among the reasons for the market’s reawakening is improvement in some key parts of the economy and increased confidence. Other factors have included government initiatives such as the Funding for Lending scheme to stimulate lending activity and Help to Buy, aimed at making mortgages more accessible, including for those with a reliable income but not enough capital for the deposit required.
On 23 July, after a meeting with the Chancellor, CML chief Paul Smee asserted: “The mortgage market is open for business, and it is clear that government support has helped to create more favourable market conditions for home-buyers. Lenders, whether they choose to participate in the [Help to Buy] guarantee scheme or stay outside, will continue to do their utmost to meet households’ needs for mortgages, but always in a way that is responsible.”
Lenders confirm market confidence
Earlier in July, Halifax said average house prices had risen 3.7% in a year. Its chief economist Martin Ellis said: “Improved confidence in both the housing market and the economy, combined with a shortage of properties available for sale, appear to be pushing up house prices.”
The Halifax findings confirmed a trend reported by Nationwide, whose chief economist Robert Gardner commented: “Demand for homes has been supported by further modest gains in employment, as well as an improvement in the availability and a reduction in the cost of credit, partly as a result of policy measures.” Even homebuyers benefiting from new schemes need to know how much they can borrow and how much it will cost: simple questions often with complicated answers and lots of ifs, buts and maybes. That is why it makes sense to consult a professional mortgage adviser, who understands the marketplace and can explain all the options.
The interest rate you pay on a mortgage may depend on whether it is fixed rate or variable rate, or another variant such as a ‘tracker’. Now the government schemes bring further variables to some mortgage calculations, so expert guidance on rules and eligibility is vital.
Key Facts
• First-time buyer numbers up 40% in a year, said Council of Mortgage Lenders
• Halifax reported that UK average house prices had risen 3.7% in 12 months
• Demand for homes supported by modest gains in employment – Nationwide
• Expert guidance on government schemes, rules and eligibility is vital
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