Rob Clifford is chief executive of Century 21 UK and group commercial director at Shepherd Direct Group
If we were in any doubt that the UK remains a nation of homeowners then this has been blown out of the water with the latest mortgage data released by the CML.
For the first time ever – albeit for only approximately 70% of all lending in the UK – we are able to see the amount of mortgages outstanding postcode by postcode throughout the country.
It makes for interesting reading and, even with house prices going up in many regions particularly in London and the South East, I wonder if there may be concerns about lender over-exposure in certain regions.
Take, for instance, the situation in the capital where a rather substantial £227bn worth of mortgages is currently outstanding – this is more than a quarter of the entire £891bn of mortgage debt secured on all properties in Britain.
While prices continue to rise in London this is probably perceived as not a major problem for the big lenders who contributed these figures however one wonders whether a bubble followed by a subsequent crash will have them thinking such happy thoughts.
The continued focus on London and the South East is really brought into sharp focus here and it’s quite clear that, regardless of all the talk about lenders lending across the entire country, they have (certainly post-Credit Crunch) focused on areas which are deemed to be less risky.
This has meant more lending ‘down South’ and will undoubtedly have helped support and push up the level of prices in this area – particularly when we consider the lack of housing being built here.
The argument from the CML is of course that lenders are not really being risk-averse and looking for ‘no risk’ lending in such areas but are instead merely lending more in places where more people live.
This is true to a certain extent but there still appears to be a much more skewed lending focus in the South East, and London in particular, which might not sit well with those who would like to see more mortgage finance available right across the country.
What will be interesting in the months and years to come is to see how Government schemes like Help to Buy are taken up regionally. Clearly Help to Buy 1 will be concentrated in areas where new housing developments are being built and the latest figures on take-up suggest that most are outside London.
The reason being that the average price of a property bought under the scheme is currently just over £194k.
With the best will in the world one doubts whether there are many new-build properties available in the capital for this figure.
It will however be interesting to see figures for Help to Buy 2 when they are released later on next year.
Given the scheme is open to all new and existing borrowers for properties up to £600k there is more chance that borrowers in London and the South East will be able to access finance.
However, will lenders concentrate their efforts elsewhere in the country – if the average price of a property under Help to Buy 2 matches that of the shared equity part of the scheme then it will undoubtedly show that Help to Buy is a scheme predominantly being accessed by those outside the South East.
What these figures also bring home is the fact our country cannot really be analysed as one mass, it has to be broken down into regions, cities, towns, villages because markets are very localised.
As estate and letting agent franchisors we know this only too well – an office that opens and is successful in one particular street might not have been anywhere near as successful just a mile or two away.
In reality, the property and mortgage market has to be looked at on a street by street basis to get any sense of its performance and ongoing potential.
These figures give a much more transparent and intriguing look at the lending market in our regions and it will be interesting to see how they develop as (hopefully) our sector continues to perform strongly in the months and years to come.
