Godfrey Blight is a director at Crown Mortgage Management
It was interesting and somewhat alarming to see headlines this week “The Brakes are on Home Loans”.
An assumption based on the fact that banks and building societies only managed a mere 70,309 loans for house purchases in February versus January’s 6 year high of 76,753 transactions. The staggering decline caused by bad weather. I was not aware that property buyers were such a sensitive bunch particularly in a market short of property supply, surely the answer is to take the brolly and get out there to do the viewings?
Of course we all prefer the sun on our backs to the winter chill, but it is a sweeping conclusion to arrive at. Surely by digging deeper you will conclude that the dip is more to do with time lag in the application process as opposed to the market imploding because of inclement conditions. It seems now to naturally take some 6 – 8 weeks before an eagle eyed underwriter has sufficient validated information in front of them to put pen to paper and say yes!
The transactions included in the total for the month of February would have been December’s viewings and application for a mortgage. In December there were fewer working days but many of those would have additionally been impacted by the Christmas break, days off to prepare for the celebrations or to get away from it all. Yet in terms of loans granted for property purchase there was only an 8% drop in February versus January’s 6 year high.
I would suggest that this demonstrates the solid strength of the recovery we are seeing and how robust the purchase sector remains in the early part of the year. It is a process lag impacting and with more and more validation needed post MMR and no sign of a cavalry of valuers appearing on the horizon to save us, the delay caused by the application process will continue it may even get worse.
Rest assured home buyers do seem to be going out in all weathers but many will enjoy Christmas festivities – expect another high for March!