Development Finance News:- Mortgages for buying homes reached 39,083 last month – a 1.4 percent year-on-year rise according to UK Finance data.
Gross mortgage lending across the residential market at £19.1bn was 2.5 percent higher than in February the previous year.
Development Finance- Property price growth looks modest
Despite the increase in approvals and rise in overall lending values Ernst & Young’s economic forecasting unit, the ITEM Club is forecasting modest house price growth of just one percent this year. If the UK leaves the EU without a deal it is predicting house prices dropping by 5 percent in 2019.
ITEM Club chief economic advisor, Howard Archer, added that Office of National Statistics data showing a 1.5 percent growth in earnings in the three months to January was positive.
“The housing market should gain some support from modestly improved consumers’ real income growth, as well as record high and rising employment and still low-interest rates. Meanwhile, a shortage of houses on the market will also likely offer some support to prices.”
He said poor performance in London and the South East had “dragged down the overall picture” on approvals and house prices.
“Housing market activity remains hampered by relatively fragile consumer confidence and limited willingness to engage in major transactions. Caution over making major purchases is currently being magnified by current heightened uncertainties over Brexit.”
Royal Institution of Chartered Surveyors, RICS’ February survey showed subdued inquiries, sales, and new instructions. More than three-quarters of respondents across the UK said Brexit uncertainty was the biggest challenge. Just over 70 percent felt it was impacting both buyers and sellers and only 8 percent thought it was having no effect either way.
However, development finance providers said lack of housing supply would keep demand high and that building finance approvals for residential schemes were likely to remain buoyant.