Editor: Yesterday, I sheepishly glanced at the latest mortgage approval numbers as they were announced by the Bank of England.
I say sheepishly, because most of us are old enough to remember that long spells of property market buoyancy are usually met with a cliff edge that reverses much of the gain. Gordon Brown referred to it as “boom and bust” and promised to stamp these peaks and troughs out. Especially the troughs, one imagines.
We’ve seen a prolonged period of house price rises in double digits despite the pandemic, a war in Ukraine and politicians’ penchants for spending time drinking beer and eating cake instead of running the country properly. We are surely due that correction?
The mortgage approval numbers showed a drop. The subsequent headlines in some media quarters screamed that “mortgage applications had plummeted” and that this, accordingly, was bad. The end of the market is nigh, it seemed. At best, financial journalists reported a ‘flatlining’ of borrowing activity and this is, seemingly, also bad.
Yet a quick delve into the history of mortgage activity at this usually fizzy time of the year for all things property shows us that with over 70,000 mortgages approved in March, homebuyers are still out in force. It’s true that it’s a small drop on February and a yard or two away from this time last year when Rishi Sunak was flirting with us via his stamp duty holiday.
Yet the truth is that these latest statistics, this most recent of litmus tests for the UK property market, show mortgage approvals higher at this time of year than in March 2020, 2019, 2018, 2017 and almost 2016.
Bust? Not anything like as such. Gordon Brown may have been right after all.
Marc von Grundherr, director, Benham and Reeves