Mortgage Approvals Not Impacting House Prices, But More People Are Renting
April’s Stamp Duty levy caused a sharp increase in mortgage approvals in January, but house prices have not risen with them.
Nationwide reported that house prices grew 0.3pc in January, while mortgage approvals rose from 71,000 in December to 75,000 in January, an increase of 5.5pc.
This is an expected spike, due to April’s stamp duty increase, which will lead to some dormancy from the spring and going into summer.
Robert Gardner, chief economist at Nationwide, said: “Looking through this volatility we expect the underlying pace of activity to increase in the quarters ahead as improving labour market conditions and low borrowing costs provide ongoing support.”
The surge in buy-to-let purchases isn’t increasing the number of home owners. While declines in home ownership have stabilised in the last year – roughly 63.6pc – the peak number was 70.9pc in 2003.
57pc of private renters do not expect to buy a home in the future, the lowest since the housing survey began in 2008.
Gardner said: “Of those who expect to buy a home, 75pc think it will take them at least two years before they can afford.”