How many property purchases are mortgage-backed buyers fuelling?

A decline in mortgage market activity is expected this year after a string of rate increases

How many property purchases are mortgage-backed buyers fuelling?

Around 71% of the £251 billion worth of property sold across Great Britain in the last 12 months has been fuelled by the mortgage sector, according to the latest research by Revolution Brokers.

Previous research highlighted how an increasing base rate has already started to impact the sector, with the average monthly level of mortgage-backed transactions falling 33% since December of last year.

However, when viewing the market over the last 12 months, Revolution Brokers said the might of the mortgage sector can be clearly seen as the driving factor behind current market success.

Across Britain, 919,936 homes have been sold in the last year, to the tune of just over £251 billion. Of these, 630,688 have been facilitated by borrowing, with mortgage-fuelled transactions accounting for a huge £177.4 billion, or 70.7% of the total market.

According to Revolution Brokers, London is the region where the mortgage sector has driven market performance to the greatest extent. Of the £44.9 billion worth of property to be sold across the capital in the last 12 months, 76% have come via mortgage-backed homebuyers, with the West Midlands (71.7%), East of England (71.5%), and North West (70.7%) also coming in above the national benchmark.

The South West is home to the lowest proportion of total market value accounted for by the mortgage sector. Even still, homebuyers borrowing to buy did so to the tune of £16.7 billion over the last 12 months, accounting for 61.8% of the total value of homes sold over the last year.

Read more: Borrowing homebuyers are now slashing their budgets – research.

At the local authority level, the mortgage sector accounts for 86.5% of the total market value of homes sold in Barking and Dagenham, with Thurrock not far behind at 85.5%. Lewisham (84.9%), Slough (84.7%), and Harlow (83.5%) have also seen some of the highest levels of total market value being driven by mortgage buyers.

“Against what is becoming an increasingly worrying economic backdrop, a decline in mortgage market activity is always going to follow a string of interest rate increases, as buyers act with a greater degree of caution when entering the market,” Almas Uddin, founding director of Revolution Brokers, remarked. “But make no mistake about it, even with a further increase by the Bank of England on the way, the sector remains the engine room of the nation’s property market and will continue to fuel the vast majority of transactions that continue to push forward.”