Mortgage lending, first quarter 1998

Citation

(1998), "Mortgage lending, first quarter 1998", Property Management, Vol. 16 No. 4. https://doi.org/10.1108/pm.1998.11316dab.005

Mortgage lending, first quarter 1998

Mortgage lending, first quarter 1998

The UK mortgage market appears to have settled into a period of gentle growth, with year-on-year lending up 4 per cent for the first quarter of 1998, compared with the same period last year, according to Barclay's Mortgage index which measures the activity of all mortgage lenders.

However, compared with the final quarter of 1997, lending has fallen 16 per cent, which is to be expected since the first quarter is, on average, a traditionally slow period in the market.

Consumer confidence is growing across the UK as a whole, according to Barclay's Mortgages Consumer Confidence Research. The number of people planning to buy a home has risen to one in four, with those planning to sell increasing to one in 11, compared with one in six and one in 13, respectively, for the same period last year. This could mean that for every ten properties that come onto the market there will be 27 people looking to buy.

Regional overviewThe Midlands is the only region to show a year-on-year fall in mortgage lending for the first quarter of 1998, with a fall of two per cent compared to the same period last year. This reflects the 24 per cent fall in consumer confidence seen in the region during the final quarter of 1997.

The South is still showing the strongest growth, with mortgage lending increasing 6 per cent in the first quarter compared with the same period last year. The North continues to show slow but steady growth, up 1 per cent compared with the same period last year.

MidlandsAlthough lending is at present weakest in the Midlands, consumer confidence is now on the increase, with nearly half of those surveyed believing that their property will increase in value over the next 12 months. This increase should be reflected in stronger mortgage lending in the coming months.

Of those surveyed, one in five plan to buy a property in the next year, with one in 19 planning to sell. Therefore, for every ten houses coming up for sale there could be 37 potential buyers, giving the Midlands the highest risk of gazumping.

SouthThe strong growth in mortgage lending in the South is reflected in consumer confidence which is the highest in the country, with the number of people planning to buy a property rising during the first quarter to one in four. The number planning to sell also rose to one in nine, meaning that for every ten houses coming up for sale there could be 23 potential buyers.

Confidence in house prices is also on the increase with 55 per cent of those surveyed believing that their homes will rise in value over the next 12 months.

NorthThe North is the only region to show a fall in confidence when compared with the previous quarter. Only 38 per cent of those surveyed now expect the value of their homes to rise over the next 12 months.

The number of people planning to sell has also fallen to one in 12, while the number planning to buy has risen to one in four. This means that for every ten houses coming on to the market there could be 30 people looking to buy.

Commenting on the latest research, Barclay's Mortgages marketing director, Jim Chadwick, said: "The outlook for 1998 is very promising with a gentle but healthy start to the year. Consumers appear to be quietly confident, which could be due to an expectation of lower interest rates in the longer term".