Contrary to the Nigerian mortgage story where those who want to get on to the property ladder cannot afford mortgage loan to enable them to own homes, the UK mortgage market presents a pleasant scenario with first-time home buyers borrowing £3.1 billion, representing 50 percent of the mortgage market lending in the country in 2016.
The UK mortgage market is worth £1.3 trillion, representative of 11.1 million mortgages, making it the largest in Europe in terms of amount lent per year and the total value of outstanding loans in 2016.
In the third quarter of 2016, the totality of homebuyers in London took out 19,200 loans worth £6.2 billion, which represented a 12 percent rise compared with the second quarter of the same.
Analysts are of the view that the high demand for mortgage loans may not be unconnected with the slowdown in the housing market arising from the April 2016 referendum result, which favoured Britain’s exit from the European Union (EU).
“The referendum result appears to have contributed to a fall in the number of people moving home. UK housing transactions in the second half of 2016 were 9 percent down on the same period in 2015”, said Johnson Ememandu, head of commercial banking at The Access Bank UK, who spoke at a seminar on ‘Impact of Brexit on UK Property Market’ in Lagos Tuesday.
Ememandu, who quoted figures from HM Revenue & Customs, added that Brexit had an impact on confidence in the housing market.
He noted however, that the main effect of the vote has been in London, which had previously been experiencing a house price boom, stressing, “Brexit uncertainty has been driving down house price growth in the capital, now at its lowest level since May 2013”.
But, Yemi Edun, a director at Daniel Ford International, said what looked like a challenge for the market presented a robust opportunity for off-shore investors who wanted to increase their asset portfolio.
“Central London is not the best place for short term investors now as rental yield, for instance, is about 2 percent to 2.5 percent per annum. But that is still better than what the banks in UK offer. For the investors with long term view of the market, this is the best time to invest”, he observed.
Danieol Ford is an international real estate firm that delivers real values in real estate to clients through acquisition, estate advisory, insurance, sales and leasing, management, new home development, renovation, etc.
Edun informed that individuals or corporate bodies could acquire property in the UK either as freehold or leasehold, advising that buyers and investors should be properly guided before making their decision.
To get mortgage for property acquisition, Ememandu listed steps, which his bank required from potential buyers, assuring that what they enter into is relationship and not transaction with their clients.
“For residential mortgages, we offer a minimum loan of £100,000 and a maximum of £2,000,000. Capital and interest repayment is for maximum of 30 years. The interest rate is 4 percent over the Bank of England base rate while lending fee is 1 percent of loan amount”, he said.

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