Here at Advantage Structural Defects Insurance, we’ve been writing about how Brexit-related uncertainty has affected the UK construction industry and housing market for longer than we care to remember! However, in recent months, we’ve seen some encouraging signs regarding house building and mortgage approvals.
At the end of January, the Bank of England put interest rates on hold amidst signs of a market pick-up. They also released figures showing that mortgage approvals have hit a two-and-a-half year high.
As reported by the Independent: The number of mortgages approved for house purchase rose to 67,241 in December, up from 65,514 in November. This was the largest number since July 2017. The value of mortgage lending rose by £4.55bn, above the £4.2bn average seen over the past six months.
The figures will add to reports that a return of buyers to the housing market after the General Election has led to a rise in prices, causing fresh difficulties for people struggling with affordability issues.
In January, Advantage shared the findings of Halifax’s house prices index, which indicated that annual house price growth has risen to 4%. This was at the top end of their predicted rate of growth of 2-4%.
As reported by The Guardian, Nationwide Building Society (one of the UK’s largest mortgage lenders) is also reporting house price growth, but at a slightly lower level than Halifax.
Nationwide Building Society said property values were 1.9% higher than a year earlier – up from 1.4% in December, showing the fastest annual growth since November 2018. The average house price now stands at £215,897 – up £615, or 0.5% higher than in December.
“Healthy labour market conditions and low borrowing costs appear to be offsetting the drag from the uncertain economic outlook,” said Robert Gardner, Nationwide’s chief economist.
According to the property website Rightmove, the average price of properties coming on to the market jumped by 2.3% between December and January, the fastest rate on record for the time of year.
So will this all mean an end to Advantage’s cautiously optimistic blogs, accounting for the ongoing effects of Brexit-related uncertainty on housing and construction? At the time of writing, we’re still expecting to see some remaining caution from house buyers and builders alike throughout 2020. However, last year, we wrote about how construction output was growing as “Brexit fatigue” set in and we think that the growing desire from buyers and builders alike to get on with things will offset some of the effects of the ongoing political uncertainty.
We’ll be back soon with our take on the latest property and construction news. In the meantime, thank you for reading!