Things are bearing well for the UK mortgage industry, as a report suggests seasonal highs.
The data to suggest this was released in a comprehensive UK Finance Mortgage Trends report earlier this week. There were 29,490 new first-time mortgages recorded in December 2019, which was 0.3% higher than the same time in 2018. But this was not the only year-on-year (YOY) gain registered in the mortgage industry.
Home-mover mortgages touched 29,400 in December, a solid 3.2% YOY gain. At the same time, 16,820 new mortgages with additional borrowing were also registered, which was an impressive 5.9% higher than December 2018. The report also revealed that the average borrowing amount for such mortgages was £50,702 in December. But not everything was on a rise here. There were 16,490 new pound-for-pound remortgages with no additional borrowing recorded in December, which was a 0.5% YOY decline.
Excessive borrowing and lending often ring alarm bells, especially after the 2008 financial crisis. However, experts seem to be calm about it.
According to Gareth Lewis (Director, MT Finance), suggested that the number actually tell a positive story – that consumers still trust the market. Cheap mortgage is also far easier to take compared to credit card borrowing, which leads to expensive charges. Despite all the uncertainty around Brexit, people are still raising money for things like home improvement, which is highly encouraging. Lewis concluded that overall, current levels of mortgages only suggest an upward trajectory for the housing market.
David Copland (Director of mortgage services, TMA) also agreed that the mortgage numbers suggest market buoyancy. However, he added that if the current positive trajectory is to continue, additional steps need to be taken.