Gross mortgage advances declined in Q2 2023 as the UK property market continued to navigate uncertain economic conditions, according to the most recent Housing Insight Report by Propertymark.
Nathan Emerson, CEO of Propertymark, shared insights into a market grappling with both interest rates and inflation. “Whilst the interest rate hold in September was good news, it offers little respite for those who need to remortgage or those seeking leveraged entry into the housing market,” Emerson said.
Though commitment to new lending increased from 48,882 to 61,666 cases between Q1 and Q2, buy-to-let advances reduced from 9.8% to 8.1% of residential loans.
This suggests a slowdown in the buy-to-let sector, which comes alongside other indicators of a market under pressure.
Loan arrears, for instance, have been on the rise both in terms of the number of loan accounts and the amount of arrears.
The Propertymark report also highlighted the broader economic challenges facing the UK, including a cost-of-living crisis and high inflation rates.
Despite these economic headwinds, the report pointed to some signs of stability in the residential sales sector, with only a slight reduction in the number of available properties in September 2023.
“However, despite inflation remaining stubbornly high, it is moving in the right direction for both households and businesses,” Emerson noted.
In the lettings market, Governments across the UK continue to modify legislation, often disincentivising landlords.
The number of new prospective tenants registered per member branch has dropped to 96 in September 2023 from 121 in August 2023, but this is likely due to seasonal fluctuations. Pressure on rents remains, although there has been some slight restraint in recent figures.
