In the aftermath of the Brexit vote, there was an economic slump, but in the last few months of 2016, the British economy grew, reported The Telegraph in January 2017. This is also reflected in the growth of the housing market and the increase in the number of new mortgages arranged.
The British Chamber of Commerce’s survey of British business found that in the final quarter of 2016, many businesses expressed increased confidence, hiring more staff and investing in business expansion. There has also been growth in the housing and mortgage sectors.
A survey by IHS Markit found that sales of new houses were strong in the last month of 2016. Many builders are increasing the number of newly built houses because of high demand for new houses.
In total, 67,505 mortgages were approved for the purchases of houses in November, which was up 10% from August in the aftermath of EU referendum result.
Over a third of mortgages are for remortgaging, with borrowers switching to lower rates. Homeowners borrowed £7.4bn in November 2016 in response to historically low interest rates.
House prices are predicted to rise moderately in 2017. The chief European and UK economist for HIS Market, Howard Archer, said:
“With housing market activity off its recent lows and the economy currently resilient, house prices look likely to rise modestly in the near term.”
Economic growth should make employment more secure, but many borrowers are protecting themselves from possible job loss by taking out mortgage protection insurance.