The mortgage market in the UK is slowing with brokers see the largest drop in business volumes in more than two years, with the trend being put down to Brexit uncertainty.
Brokers have revealed that the average number of cases they handle on an annual basis dropped by 10% in the third quarter of 2018, from 90 to 81 cases, the largest quarterly drop since the first quarter 2016.
The latest monthly report from the Intermediary Mortgage Lenders Association (IMLA) suggests that potential buyers are taking a wait and see approach and fewer brokers are very confident about their business going forward, down to 60% from 68% in the second quarter of the year.
The research also suggests that fewer brokers are feeling positive about the mortgage market in 2018 as a while. In the first half of the year some 33% of brokers felt the current market would improve a little but by the second half this had fallen to 20%.
But it also found that for those who do move forward with a property transaction, the market continues to work well with 88% of all mortgage applications leading to offers.
‘Sentiment among buyers and movers is currently at a low point. Whilst the Brexit negotiations remain so complex and uncertain, many people may be adopting a wait and see approach before moving forward with a property purchase,’ said Kate Davies, IMLA executive director.
‘While the national uncertainty doesn’t help the prospects of our mortgage brokers, it’s encouraging to see that when an intermediary does apply for a loan on their client’s behalf, they are being accepted. Mortgages going from application to offer remain at more than two-year highs as intermediary lenders continue to find solutions for clients,’ she explained.
‘It’s also good to see that while fewer people are seeking finance to buy a property, the remortgage market remains strong and should ensure keen and competitive pricing for those property owners seeking a new deal,’ she pointed out.
‘With signs that the Bank of England may also be adopting a wait and see approach towards potential future rate rises as next March’s Brexit deadline gets closer, borrowers should continue to be able to lock into attractively-priced deals before the Bank reacts,’ she added.
