2019 saw the first annual fall in gross mortgage lending since 2010, UK Finance has reported.
However, it said that new homeowners in Northern Ireland and Yorkshire & Humberside, and homemovers in Scotland have benefitted from relative affordability advantages.
In addition, the buy-to-let market, while still contracting, is levelling off with some growth in the North.
UK Finance said prospects for growth in remortgaging markets are limited, both as a result of lengthening deal rates and fewer mortgages on Standard Variable Rates (SVR).
Alan Cleary, group managing director at OneSavings Bank, said: “These figures reflect the uncertainty that was prevalent in the last quarter of 2019. With the election decided and Brexit now progressing the market has more clarity and increased confidence in 2020.
“Recent research found that London, the first region to experience a slowdown in the property market after the 2016 Brexit vote, is seeing a return to strong price growth. In Camden, prices rose by 5.7% over the month, adding £50,000 to the average house price in the borough.
“For activity to continue at any significant rate, a lot will depend on Chris Pincher, the 10th UK housing minister in 10 years, and Rishi Sunak, as the new Chancellor delivers his first budget on March 11th. Personally I hope he takes the opportunity to re-assess the 3% surcharge on buy-to-let purchases which has seen rents rise as landlords look to recoup their investment. This of course has had a knock on effect on those renting who are trying hard to save for a deposit. When more houses are built, the market will hopefully see a genuine adjustment to average mortgage deposits and the age of first-time buyers.”
Shaun Church, director at Private Finance, added: “The fact that first-time buyer numbers fell in all but two English regions last year is a timely reminder for the new Chancellor ahead of his Budget debut next week that the foundations of the property market still need some care and attention.
“The Help to Buy equity loan scheme continues to exist on borrowed time, while homemovers’ struggles to climb up the ladder aren’t doing any favours in terms of freeing up housing stock. Too many people are facing an upwards challenge to upsize, or a downsizing dilemma whereby the sums of money involved can make it difficult to see whether it’s even worth exploring a move.
“After years of watching an increasingly clogged-up market, it’s high time for another round of surgery to stamp duty rules to make moving more practical at both ends of the housing ladder.”