The home lending market in the UK has not been affected by Brexit with the latest figures showing that gross mortgages reached £20.5 billion in September.
This was the highest September lending figure recorded by the Council of Mortgage Lenders since 2007 and was 2% higher than September 2015 but it was 7% lower than August’s lending total of £22.1 billion.
It means that gross mortgage lending for the third quarter of 2016 was an estimated £63.6 billion, 11% higher than the second quarter of this year and 4% higher than the third quarter of 2015.
‘Remortgage activity looks set to grow, helped by attractively priced mortgage deals encouraging borrowers to refinance. Prospects for house purchase activity continue to look slightly subdued, when compared to the same period a year ago,’ said CML senior economist Mohammad Jamei.
‘Despite this, housing market sentiment continued to improve in September, after recovering in August. As a result, we expect a modest rise in approvals, though at levels lower than seen earlier this year, as the lack of properties on the market for sale and affordability constraints continue to bear down on borrowers,’ he added.
According to Peter Williams, executive director of the Intermediary Mortgage Lenders Association (IMLA), the data depicts a mortgage market undeterred by the European Union referendum result and very much open for business.
‘The 11% increase in lending between the second and third quarters shows that borrowers weren’t put off by the economic shadow that a drawn out Brexit process threatens to cast and lenders haven’t suppressed their appetite to meet this demand,’ he pointed out.
‘September is often a month when house hunters renew their pursuits after pausing their over summer, but this year’s saw the highest September figure since before the global downturn. Any potential bumps in the road are unlikely to come from mortgage lenders as the availability of competitively priced deals remains high, both for purchasers and remortgagors, but issues on the supply side could inhibit activity,’ he explained.
‘The consumer appetite is there, but the simple fact remains that there simply aren’t enough properties coming on to the market at the moment to satisfy this demand, so more thought needs to be given as to how to increase transactions, not least by revisiting stamp duty,’ he added.
Henry Woodcock, principal mortgage consultant at IRESS, believes that the month on month fall is just a blip and pointed out that the total number of mortgage products has increased over the last 19 months to 24,415, pointing to fierce competition.
He also pointed out that the impending closure of the Help to Buy mortgage guarantee scheme at the end of the year could result in a last minute rush by low deposit borrowers to secure an attractive deal.
‘No doubt we’ll see lower numbers as we head into the mid-winter seasonal slowdown in activity, however the signs for October still look pretty positive,’ he added.
