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The latest UK housing market analysis from Mortgage Advice Bureau has revealed that there has been a moderate level of house price growth in the first quarter of 2017.

According to MAB, Its National Mortgage Index has shown a marginal change in the average purchase price across the UK of less than 0.5% and minimal change in the average size of remortgage loan at 1.5%.

Age and income levels unchanged

Applicant age and income levels also remained broadly unchanged across key groups including residential purchase, residential remortgage, first-time buyers and buy-to-let.

However, the average first-time buyer purchase loan rose by 8.5% in March 2017 to £154,747, up from £141,583 in February.

It would seem that the market has found a ‘new normal’ and has made a natural adjustment following the government’s intervention in terms of taxation on landlords and buy-to-let lending legislation from the PRA

Brian Murphy, Head of Lending for Mortgage Advice Bureau, commented: “Overall activity levels so far in 2017 have been healthy, with recent data from the CML suggesting that borrowers took out more loans to purchase a home in the first two months of 2017 than any year since 2007, which is a solid reflection of ongoing consumer confidence in bricks and mortar. However, the market is still in an evolutionary stage and has created an equilibrium which indicates a much calmer picture, rather than a ‘spring spike’ in Q1 activity which may have created a more volatile outlook.

A new normal

It would seem that the market has found a ‘new normal’ and has made a natural adjustment following the government’s intervention in terms of taxation on landlords and buy-to-let lending legislation from the PRA. These two factors combined would seem to have had an effect on the market, by freeing up stock at entry level. Clearly, this was the intention of the measures which were introduced last year, and evidence of this is beginning to filter into the market now with first-time buyers picking up the slack in many areas of the UK where buy-to-let purchase transaction numbers have fallen.

With the exception of the East of England, where house prices have seen significant levels of annual growth, and London, which as ever continues to operate under its own microcosm, the majority of the UK is currently experiencing a gentle rate of annual growth, as has been as reported by various industry bodies in the past few months.

It’s possible to suggest then that perhaps the market has found a level which could form the basis of a steady market over the coming months unless consumer sentiment changes significantly as a result of the upcoming election, which we believe is unlikely. This in itself is perhaps not a negative situation, as a calm and steady picture overall would benefit many, particularly given current political and economic factors.”

By Warren Lewis

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