Look closer for a brighter view

Mike Walters, Head of Sales – Mortgages & Bridging – United Trust Bank

When looking at UK house price growth there are a variety of indices tracking and collating data from cross the country. The Nationwide, Halifax, Rightmove and LSL Acadata indices show average price increases ranging from 1.1% up to 3.7%. Nationwide also reported a month to month decline of -0.5%, the biggest monthly fall since July 2012. The divergence in views can be partly due to the different mix of properties being considered – for example Halifax and Nationwide have a cap on the size of the mortgages they are willing to provide, which tends to mean they do not get exposure to the top-end of the market.

The LSL Property Services Index, looking at residential prices in England and Wales and released mid-September, suggested an annual growth rate of 1.8% but instead of a monthly fall in prices, their figures indicate prices were up a modest 0.1% in August, ending the run of falls recorded since March. Interestingly the highest growth rate recorded was for Greater London at 3.6% whilst the lowest was the South East at 0.2%.

The 3.6% increase for Greater London is a good example of how a relatively low number of transactions in the prime London market can skew the figures. LSL recorded 61 transactions in the City of London in June of which 17 were related to a new development with average selling prices of £2m – £6m. There have typically been around 17 sales per month in total in the City of London over the last year so with this higher volume at premium prices this relatively small number of transactions has pushed the average price in the City to a new high of £1,090,000.

Other parts of the country have not only seen increasing transaction numbers between May and July this year but price growth too. According to Land Registry data, despite the total number of transactions across England and Wales falling to the lowest levels since 2013, the North East saw an 8% increase for May to July compared to the same period last year and the North West and Yorkshire & Humber also saw transaction number grow by 1%. Prices in the North East have risen by 2.6% annually, the West Midlands by 2.9% and the East Midlands by 2.7%.

Regardless of which index you choose to follow, political uncertainty, particularly surrounding the post-Brexit environment, is undoubtedly affecting activity in some areas of the market. But while the headline figures can sometimes suggest a gloomy outlook, looking a little closer can give a brighter view. UTB is continuing to invest in people and technology as we seek to develop and further improve the Bank’s mortgages and bridging offering to brokers across England and Wales. Since embarking on a program to extend UTB’s services and support to brokers beyond London and the South East we have seen a considerable increase in new business volumes and growing interest in the benefits UTB’s bridging and specialist mortgage products can bring to brokers and their customers.

Our multi-award winning Second Charge products remain firm favourites amongst brokers and packagers and our recently launched Mini-Mortgage is fulfilling what it was designed for, quickly providing smaller mortgages to customers for a variety of purposes and without a reliance on credit scoring. To give you one example, Calum Sayer at Pink Pig Loans recently introduced a Mini-Mortgage application to us for a customer looking to borrow £22,000 for home improvements. We received the application on the 6th of September, offered on the 7th and funded on the 10th – 3 working days from application to completion!

In the last few weeks Kerry Bradley and Paul Delmonte have joined our successful Sales team and they, together with Paul Mansell, Nick Warren, Chris Pedlar and I, are out on the road taking the UTB brand, encompassing great products and outstanding service, to brokers across the country. So, although the news headlines may be creating uncertainty right now, the view from UTB is refreshingly optimistic.