Comments on the state of the mortgage market

Will North, director of core credit for TransUnion in the UK, looks at the UK Finance statistics on Mortgage Trends and financial wellbeing expectations released this week from IHS Markit: “The latest statistics from UK Finance show both homemover and first-time first-time buyer mortgages in December 2019 were up compared to the same month the previous year, contrasting with the decline seen in November. Given the uncertainty in the wider economy at the end of 2019 – as the nation headed to the polls and the Brexit deadline loomed – it’s encouraging to see growth in spite of those things, and reaffirms that there seems to be a sense of renewed consumer confidence as we move into the new decade, as highlighted in our Consumer Credit 2020 report.

“Analysis released this week on financial wellbeing expectations showed a notable rise in overall perceptions in February, further supporting this view. The level of optimism reported was at its highest in over 10 years while house price expectations were the strongest since August 2018.

“Our own research also points to growth in the year ahead, and confirms that the aspiration for younger generations to get onto the property ladder remains strong. We found that 23% of those aged 18 to 24, and 33% of those aged 25 to 34 expect to apply for a mortgage in the next 12 months, whilst over a third (35%) of 18 to 24-year-olds are regularly saving to buy a property or home.

“Whilst that movement in the market from the bottom up is a positive indication of what’s ahead, it’s also imperative that lenders are using all the data at their disposal to make accurate and informed decisions, ensuring that payments for mortgages are affordable and stress-tested in case of a change financial circumstances. With more nuanced and comprehensive detail available than ever before, thanks to the likes of trended data and open banking, this can be easily and effectively managed, and finance providers have a duty of care to make sure the right checks are in place.”