Property Development News:- Mortgage approvals for house buying were 8.6 per cent higher in April than the same month in 2018, according to the trade body for banks, UK Finance.
They rose to 42,989 in April from 40,564 in March – a clear rise on the 38,000 to 40,000 range that had previously largely held since the beginning of 2018.
However, gross lending across the residential market in April 2019 was £20.3 billion, some 1.4 per cent lower than the same month in 2018.
Demand for residential properties still healthy
EY ITEM Club chief economic advisor, Howard Archer said: “April’s rise in mortgage approvals suggests that housing market activity may have got at least some temporary support from the avoidance of a disruptive Brexit at the end of March. It may also be that the housing market has benefited from recently improved consumer purchasing power and robust employment growth.”
The economic forecasting group said a shortage of properties on the market and low-interest rates should continue to support house prices which it predicted will rise by 1 per cent this year.
Finance brokers Hank Zarihs Associates said the latest data showed consumers were still keen to buy rather than rent homes. Chief executive Shiraz Khan said house builder activity and request for construction loans and property development and refurbishment finance was buoyant.
The EY ITEM Club forecasts house prices rising by around 2 per cent throughout 2020 if the UK leaves the EU at the end of October with a deal. But if the UK leaves without a deal price are predicted to drop quickly by 5 per cent.
Howard warned that prolonged uncertainty would weigh down on the economy and hamper the housing market.
“The suspicion has to be that the labour market and earnings growth may well increasingly struggle to sustain their recent strength as companies tailor their behaviour to a relatively lacklustre domestic economy prolonged Brexit uncertainties, a fraught domestic political environment and a challenging global environment.”