Figures from the Bank of England reveal that the number of new mortgage commitments agreed by lenders fell to a two year low during the first quarter of 2018. The number of advances has also fallen, signalling that there’s a fall in property demand across the UK.
The value of new mortgage commitments during the first three months of 2018 fell by 5.9% when compared to the previous quarter, at £6.1 billion. The number of advances fell further still by 9.6% to £62.4 billion. The fall has been fuelled by a lack of first time buyers, which accounted for less than a fifth of agreed mortgages over the period. The fall in agreed mortgages coincided with a rise in reportages, which increased by 3.2% to reach 32.9%.
The statistics indicate a lack of consumer confidence which has been tied to the ongoing uncertainty related to Brexit and what it will mean for the wider economy. As a result, many potential first time buyers and movers are choosing to bide their time. Depending on the outcome of the Brexit negotiations, it could mean a stagnation or surge when the Brexit deadline comes around next year.
What can property businesses do?
With the number of agreed falling, it could represent a challenge for property businesses in the selling market but there are some steps that can be taken to reduce the risk and ensure profit continues to come in.
- Identify property hotspots – There are some areas of the country that are experiencing rapidly rising property prices, reflecting strong demand. If you’re looking to make a new investment now, it pays to know where the up and coming areas are.
- Consider letting – With news that 70% of tenants aren’t looking to buy, the letting market has the potential to keep offering lucrative profits. Student cities, in particular, are great options for reliable returns.
- Keep in mind key features – If you need to sell a property now, keep in mind the top features that homeowners look for. Some can be added to your space, such as fireplaces, to make them more attractive. Be sure to highlight the features that your property does possess clearly in the descriptions and photographs.
- Wait for the market to recover – While a fall in the number of agreed mortgages might mean that demand is temporarily less, the property market has proven numerous times that it’s able to recover. Sometimes simply waiting for the right offer to come along is the best option.
Whether you want to invest in your next land development project or rapidly expand your letting portfolio, get in touch with GIC Capital – we have the means to provide you with attractive, flexible finance options.