Mortgage approval and house price figures to shed light on health of property sector

Close scrutiny will be paid to mortgage approval and house price data this week as analysts assess the prospects for the property market in the year ahead.

The Bank of England is due to release the latest monthly mortgage approvals data while major lender Halifax publishes its monthly average UK house price survey.

Recent data showed that the number of mortgage approvals was the lowest since June 2020, with net lending no higher than in 2008 as the financial crisis was unfolding.

Experts noted that stamp duty changes from the start of October may have influenced some buyers, even as other incentives were offered to first-time purchasers.

Major lender Halifax is due to publish its latest monthly average UK house price survey.

Analysts at investment firm AJ Bell said: “The other nagging issue remains housing affordability. It is surely too early to tell whether the Bank of England’s unclear messaging ahead of its November policy meeting (when it ultimately did nothing) affected house buyers’ plans but the prospect of higher interest rates was at least out there. In addition, house prices have continued to surge.

“They rose 8.1 per cent year-on-year in October, the month of the last mortgage lending survey, and by 8.2 per cent in November, the month for the upcoming survey. That was enough to take the average UK house price to £272,992 according to the Halifax, a new record high.

“Compared to an average weekly UK total pay of £586, or just over £30,000, even a £259,000 mortgage (with a 5 per cent deposit) is a huge undertaking for any couple, let alone an individual.”

A message from the Editor:

Thank you for reading this article. We’re more reliant on your support than ever as the shift in consumer habits brought about by coronavirus impacts our advertisers. If you haven’t already, please consider supporting our trusted, fact-checked journalism by taking out a digital subscription: www.scotsman.com/subscriptions