A property lending expert has issued an update on the UK property market, and says “even house prices” will be affected. Though it’s already been a promising start to the year, it’s set to improve further, claimed CEO of Octane Capital, a specialist short-term lender company.
CEO Jonathan Samuels predicted seasonal trends will “bring a healthy boost to the market” as spring turns to summer. House prices too, he says, will continue to stabilise – tempting sellers back to the market.
His latest market analysis reveals mortgage lending has fallen by -28.6 per cent in the past year, but with spring upon us and summer just around the corner, seasonal housing market trends should bring a welcome boost to mortgage lending totals over the coming months.
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“There is a real sense of optimism in the UK property market at the moment,” he commented. “It’s been a promising start to the year with mortgage lending seeing an uptick, mortgage approvals doing the same, and even house prices starting to slowly climb after a period of stagnation.
“The picture is set to improve further as spring makes way for summer and seasonal market trends bring a healthy boost to the market. As such, we expect house prices to continue to stabilise which will inevitably tempt more sellers back to the fold.”
Octane Capital analysed gross mortgage lending data* from the past two years (March 2022 – Feb 2024) to understand how the amount of money being lent to homebuyers has changed. Latest figures show that over the past year (March 2023 – Feb 2024), mortgage lending in the UK came to an accumulated total of £217.7 billion.
This marks an annual decline of -28.6% compared to figures from the previous 12 months (March 2022 – Feb 2023) when lending totalled £304.9 billion. A number of contributing factors have led to the decline in mortgage lending over the past year, not least the increased cost of borrowing due to heightened interest rates and the overall cost of living crisis.
Both have limited buyer purchasing power and, as a result, mortgage lending market activity. But, looking forward, it seems the past year’s housing market troubles could be finally lifting, with mortgage approval numbers increasing as a hold on interest rates has helped to steady the market.
In addition, further analysis from Octane Capital shows that historic seasonal housing market trends* are likely to bring a welcome boost over the coming months. Octane Capital’s analysis shows that, over the last five years, the summer season has seen mortgage lending totals increase by an average of 11.7% compared to the spring months.
This summer boost has occurred every year over this five-year span, with the largest single bump coming in summer 2023 when mortgage lending totals rose by 24.6 per cent. As such, Octane Capital’s research suggests that while the market is showing strong signs of recovery at present, this biggest surge in mortgage market activity is yet to come in 2024.
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