Mortgage approvals and house prices both rise in July

Data released this month by The Royal Institute of Chartered Surveyors and the property specialists Rightmove.co .uk showed upward movements in both the number of home loan approvals and the prices of property put on the market, with a spokesman for Rightmove.co.uk adding that they felt the “window for property bargains was now closing, ” in an analysis carried out by UK regulated specialist broker Offshoreonline.ORG.

According to the Royal Institute of Chartered Surveyors and the Bank of England, the number of mortgage approval rose to a 14 month high. Banks granted 47,584 home loans, compared with 44,169 in May. East Anglia, London, Yorkshire and the South West all saw significant rises in the asking price of properties, with London up 1.4% in the month and Yorkshire up 4%.

Tim Harvey, Offshoreonline.org’s managing director comments, “This data presents a fascinating picture, coming as it does at a time when UK unemployment levels are rising, which should have a dampening effect on the market. It is true that the supply of property onto the market remains at historically low levels, with Rightmove showing just 70 properties on average per agent being marketed, a figure some 10% below the same time last year. This will tend to push prices up, as demand is certainly recovering, particularly amongst expatriates who are not affected by the UK’s domestic economic circumstances.”

Mortgage availability continues to improve, according to Offshoreonline.org, with competitive variable rate tracker mortgages available from 3.44%. Fixed rate loans however are trending at well over 6% in many cases, making them poor value, according to Offshoreonline.org. The Bank of England Quarterly Inflation Report issued this week suggested rises in UK Base Rate are still some way off and are likely to come later than most expect. This being the case, buyers are better off sticking with a variable rate loans at present, such as trackers, thinks Offshjoreonline.org. Tim Harvey adds, “With a tracker rate of 3.44% and 5 year fixed rates of around 6.8%, the Bank of England would need to raise UK Base Rate over 13 times before the fixed rate loan became more attractive. In the short term, we simply do not see that happening.”

Over the coming months, the supply of houses should rise to reflect the real increase in demand which is being seen. The best deals will go to those who have a 20% to 35% deposit and are prepared and ready to move quickly and that means for the expatriate, with their necessarily more complex financial arrangements, getting their loan facility approved in advance. It also means having a mortgage provider whose back office system can move quickly, which is where the specialist brokers such as Offshoreonline.org can help weed out the chaff.

For more information of mortgages available, visit offshoreonline.org.