Mortgage approvals in the UK are on a declining trend, raising concerns among homeowners and potential buyers. Net mortgage approvals fell from 49,500 in July 2023 to 45,400 in August 2023, following a continuous drop from 54,600 approvals in June 2023. Open Property Group has conducted in-depth research into the current state of UK mortgage approvals and sought exclusive insights from industry experts. Here’s what the experts had to say:
Question 1 – Do you forecast an uplift in UK Mortgage Approvals within the next 12 months?
Ben Grey from CHN Financial Consultancy expresses a pessimistic view, highlighting issues not only for applicants but also for valuers. He notes that surveyors valuing properties on behalf of lenders are increasingly cautious. This caution often leads to buyers needing additional funds, which may not be readily available, or renegotiating prices, a challenging task in the current market.
On the other hand, Mark Hansard from First Financial is more optimistic. He anticipates an approval uplift, citing that people have become more accepting of slightly higher interest rates. He also points out that there is a surplus of properties on the market as Buy-To-Let landlords sell some of their portfolios, creating opportunities for first-time buyers.
Question 2 – Have you spotted any Mortgage Approval patterns across specific regions?
Ben Grey from CHN Financial Consultancy believes that the strictest valuations are not necessarily region-based but tend to be applied in areas where house prices have seen significant inflation in recent years, particularly in higher-value areas.
Question 3 – Have you spotted any Mortgage Approval patterns based on property type?
Wayne Hill from M&G Mortgages notes that more people are opting for flats over houses in the transactions they have handled.
Question 4 – Have you spotted any Mortgage Approval patterns based on first-time or second-time buyers?
Wayne Hill from M&G Mortgages observes that there are more approvals for first-time buyers compared to second-home movers. He suggests that existing homeowners are cautious about taking the next step due to the prospect of doubling their mortgages and rising interest rates.
Mark Hansard of First Financial discusses the changing landscape, mentioning that some lenders are offering increased income multiples for clients with higher earnings. He also notes that certain lenders are allowing clients to put more on interest-only mortgages if they have a suitable repayment plan in place. He believes that first-time buyers getting accustomed to interest rates between 3% to 4.5% is not necessarily a negative development.
Open Property Group, specialists in helping homeowners sell their houses quickly, regardless of economic conditions, believe that despite ongoing market uncertainty, there is a growing consensus about what the “new normal” in terms of interest rates will be. They acknowledge varying opinions among experts but suggest that fluctuating market conditions point towards a more cautious outlook than an optimistic one.
For the complete Expert Commentary Q&A, visit https://www.openpropertygroup.com/landlord-hub/uk-mortgage-approvals/
