A summary of UK residential mortgage transactions for quarter 2 1997

Citation

(1998), "A summary of UK residential mortgage transactions for quarter 2 1997", Property Management, Vol. 16 No. 1. https://doi.org/10.1108/pm.1998.11316aab.005

A summary of UK residential mortgage transactions for quarter 2 1997

A summary of UK residential mortgage transactions for quarter 2 1997

This summary is based on the Mortgage Market Database (MMDB) run by CACI Information Services. It is the most complete mortgage data available, including over 92 per cent of all mortgage transactions with the remaining 8 per cent modelled to provide an accurate picture of the market. The figures in the MMDB are a major source of information for the participating mortgage lenders, including Halifax and Barclays.

In addition to the summary we can provide different breakdowns of the data by region, mortgage type, etc.

CACI plans to publish these figures on a monthly basis in 1998.

Mortgage market database: summary of residential mortgages quarter 3 1994 to quarter 2 1997

Market grew by 15 per cent. Scotland increases by 20 per cent. Fixed Rates increase to 31 per cent of loans. Average completion amount rises by 4 per cent.

The number of mortgage completions grew by 15 per cent in Quarter 2 1997 compared to Quarter 1 1997. This should be seen as a seasonal increase, reversing the two previous quarterly declines. The number of mortgage completions in Quarter 2 1997 are 5 per cent below those of Quarter 2 1996. All regions experienced increasing levels of mortgage activity compared to Quarter 1. Scotland and Northern had the highest increase in activity among the regions, growing by a fifth (see Figure 2).

Activity among first time buyers increased during Quarter 2 by 23 per cent on the previous Quarter. This reversed the decline in the proportion of first time buyers suffered in Quarter 1 1997. Activity levels among existing buyers rose by 17 per cent. The average value of new main mortgages increased by 4 per cent on the previous quarter. The average value of main loans is 6 per cent and 16 per cent higher in Quarter 2 1997 when compared to Quarter 2 1996 and Quarter 2 1995 respectively. This mirrors the reported rises in house prices (see Figure 3).

The number of Fixed Rate mortgages increased by 59 per cent in Quarter 2 1997 compared to Quarter 1 1997.

This was the second consecutive quarterly increase in activity. They now account for 31 per cent of all mortgages. Standard Variable Rate mortgages fell in Quarter 2 by 12 per cent. The number of discount mortgages rose in absolute terms, but fell to 38 per cent as a proportion of all new mortgages (see Figure 4).

Mortgages backed by an endowment policy again continued to decline as a proportion of all loans. Endowments now account for 43 per cent of all loans advanced. However, they are still the most common method of repaying a mortgage. Capital Interest mortgages declined as a proportion of all loans Quarter 2 to 35 per cent. PEP or Pension backed mortgages increased in absolute number and as a proportion of new loans in Quarter 2 (see Figure 5).