UK Finance: Gross mortgage lending declines by 1.1%

Jessica Nangle

January 27, 2020

mortgage products drop

Gross mortgage lending across the residential market in December was £22.2bn, bringing the annual total for 2019 to £265.8bn in 2019 according to the latest UK Finance Household Finance update.

This figure is 1.1% lower than figures recorded in 2018, however the past two years have reflected a stronger long-term lending trend over recent years.

An annual total of 982,286 mortgages were approved by the main high street banks during 2019, which is a year-on-year increase of 7.4%.

The full year number of mortgages approved for home purchases were up by 8%, remortgage approvals rose by 7.9% and approvals for other secured borrowing were 3% higher than in 2018.

Vikki Jefferies, proposition director at PRIMIS, said: “After a more subdued end to 2019, today’s figures show that market activity remains stable.

“For those who can afford a house deposit, ongoing low interest rates will work in their favour.

“What’s more, going through an intermediary will enable borrowers to take advantage of the range of deals out there– some of which may not be available via an execution-only route.

“Advisers can be kicking off the new year by looking through their client banks and contacting those coming to the end of their terms.

“As today’s figures indicate, remortgaging continues to be an attractive option for borrowers, and advisers can be capitalising on this to ensure that more of their clients take advantage of the low rates available.”

Personal borrowing through loans in December 2019 was 14% higher than the same time in 2018.

Personal deposits grew by 2.5% in the year to December 2019, with three-quarters of deposits were held in immediate access accounts.

Steve Seal, managing director at Bluestone Mortgages, added: “Today’s figures highlight the resilience of the UK’s mortgage market.

“However, we can’t forget the growing number of “non-vanilla” consumers struggling to access lending.

“In fact, according to Bluestone’s Specialist Lending Tracker over a quarter of customers cited adverse credit as a reason for being rejected for a mortgage by a high street bank.

“This highlights the growing importance of the specialist lending sector in helping borrowers with complex financial backgrounds.

“It will be up to advisers to help guide these customers to the best lending solutions for their circumstances, ensuring that more can access the financing they need.”

John Goodall, chief executive and co-founder of Landbay, said: “Even without any clarification on Britain’s trading relationship with the EU, mortgage lending in the UK looks encouraging for the coming months.

“These strong approval figures reflect improving consumer confidence fuelling a further rise in mortgage lending as demand, previously contained by would-be buyers, is released.”

Richard Pike, sales and marketing director at Phoebus Software, spoke about the difficulties the London and South East markets faced in 2019.

He added: “The increase in the number of overall approvals in 2019, against the fall in value, shows quite clearly the effect the weak market in London and the South East had over the year.

“When you consider the number of high-value properties in that area it is easy to see the effect a decline in sales has on the value of mortgages approved as an average.

“We saw a rise in first-time buyer activity throughout the year and the mere fact that overall home purchase numbers increased, and not by an insignificant amount, is demonstration that not everyone was resting on their laurels waiting for some sort of certainty last year.

“As we head into a more stable environment politically it will be interesting to see how the market fairs and how far the government will go to help the housing market in the long-term.

“Or if indeed, now that we have a degree of certainty, the market will continue in its current vein.

“No matter how some may be looking for a return to headier days, perhaps we should all be happy with a steadily improving market?”

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