The United Kingdom’s high street banks approved close to a million mortgages in 2019. Data gathered by LearnBonds.com indicates that 982,286 mortgages were approved in 2019, an increase of 7.4% from 2018’s 909,597.
The mortgage approval entails loans for home purchase, remortgaging and other loans. Compared to 2018, the number of mortgages approved for home purchases was 8% higher in 2019. The data indicate that 507,789 mortgages approved in 2019 were for house purchases.
In December 2019, there was a slight drop in the loans approved for home purchases at 32,451 compared to November’s 43,589. From the second half of the year, there was a spike in loans for home purchases with the highest figure being recorded in July at 51,160, an increase of about 5.39% from June’s 48,539.
According to experts, the jump recorded in December might be a direct impact of the mortgage interest rate drop recorded in the second half of the year.
January [2019] recorded the least number of approval for home purchases at 26,145. However, this was an increase of 10% from December 2018 approval.
In 2019, the overall remortgage approval was 7.9% higher compared to 2018. However, Year-on-Year approved number of remortgages (Dec-18 vs Dec-19) are up by 30,6%. Data indicates that the total remortgages in 2019 were 367,590. A remortgage is where a property owner takes out a new mortgage on a property he already owns. This can be done to either replace an existing mortgage or to borrow money against your property.
In 2019, the highest remortgages approval was recorded in October at 38,549, an increase of about 11% from August 32,490. December also recorded one of the lowest mortgage approval at 26,979, this was a drop from November’s 34,653. The least remortgage approval was in January at 23,618 which was an increase of 12% from December 2018. Year-on-Year approved mortgages for house purchase (Dec-18 vs Dec-19) are up by 24,1%. Generally, in 2019, the average number of approved remortgages per month was 28,664.
On the other hand, approval for other secured borrowing was 3% higher than in 2018. In total, this category of mortgages had 106,907 approval in 2019. From the data, December had the least number of mortgage approval for other loans at 6,960. This was a significant drop of 15% from November’s 8,234 approval. Year-on-Year approved other secured borrowings (Dec-18 vs Dec-19) are up by 23,5%.
Under this category, the highest approval was recorded in July at 10,174. January and February recorded almost a similar number of approval at 8,353 and 8,352 respectively. December 2018 recorded 5,634 approval under this category.
The data further indicates that gross mortgage lending across the property market in December 2019 was £22.2 billion, bringing the annual total for 2019 to £265.8 billion, a figure that was 1.1% lower than in 2018 for the full market.
Within this figure, the high street banks’ lending was £172.1 billion, which is 21.9% higher than in 2018. Cumulatively, the lending was £437.91 billion for 2019.
A review of the data shows that the full market and high street bank lending experienced a spike in October 2019. The full market had mortgage lending at £25.1 billion while the high street bank issued £17.1 billion.
There was a slight stagnation between July and August for both lenders. For the full market, mortgage lending was £24.2 billion for July and £23.9 billion for August. On the other hand, the two months issued loans worth £16.07 billion (July) and £16.12 billion (August).
From the data, the uncertainty around Brexit contributed to the drop in mortgage lending with the housing sector struggling. The situation contributed to making buyers put on hold any big purchases until the Brexit uncertainty had been cleared.
According to economists, after the UK general election, there might be a boost in property transactions and mortgages. Furthermore, experts believe that although the 2019 figures are still low based on historical standards, a review of the circumstances shows the market performed well.
At the same time, the Bank of England is contemplating cutting interest rates after the UK economy flatlined towards the end of 2019 amid intense political uncertainty over Brexit and the snap general election.
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