Rise in Confidence
The Housing Market Sentiment Survey from Zoopla also found that confidence has increased by 4% since last October, but has not returned to the levels seen this time last year (92%).
Although overall confidence has increased, the survey revealed a fall in the number of those planning to buy or sell property. Just 18% of homeowners are intending to purchase a property in the next six months (down 7% since October 2016) and only 17% plan to sell (down 6% since October).
In addition, obtaining mortgage approval is now seemingly easier than it was this time last year. Only 29% believe it is now more difficult to get approval for a mortgage (down 3% from 12 months ago).
“Despite a continued period of political uncertainty, it’s encouraging to see a rise in confidence for property price growth,” said Lawrence Hall, spokesperson for Zoopla. “However, despite this, we can’t ignore that there’s been a rise in reluctance to buy and sell properties. With the upcoming general election, it’s perhaps no surprise that people may be holding out to make a purchase or sale decision until after June 8th.”
Mortgage Activity Increases for First-Time Buyers
The latest figures from the Council of Mortgage Lenders (CML) also revealed low levels of housing activity amongst existing home owners. However, it also found evidence of a growth in activity amongst first-time buyers and people remortgaging properties.
It found that while loans to home-movers decreased year-on-year compared to March 2016, more loans were advanced to first-time buyers this year than in any month of March period since 2007.
On a quarterly basis, house purchase activity was at its weakest for two years since the first quarter of 2015. By contrast, the number of remortgage loans advanced to borrowers was at its highest since the first quarter of 2009.
In addition, the CML data shows that affordability metrics for first-time buyers saw the typical loan size increase slightly from £132,200 in February to £133,500 in March. The average household income remained the same month-on-month at £40,000. This meant the income multiple went from 3.54 to 3.53.
The average amount borrowed by home-movers in the UK decreased to £172,000 from £176,000 the previous month, while the average home-mover household income decreased slightly month-on-month from £55,000 to £54,100. The income multiple for the average home-mover was unchanged at 3.34.
Current Trends Expected to Continue
“Comparing this March to last year is misleading because of the peak in activity before the stamp duty changes last Spring,” explained Paul Smee, director general of the CML. “Overall, lending trends have remained reasonably consistent. The relatively sluggish activity among home-movers stands in contrast to the growth in first-time buyer and remortgage activity, but in aggregate the market is showing broadly the levels of activity we expected.”
“As we head into the summer, we expect a continuation of these trends, with both first-time buyer and remortgage lending expected to maintain momentum in the light of the very attractive deals currently available,” he added.
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