House prices: Mortgage figures 'point to market slowdown'
12-16-2016
CML report adds to claims market confidence has been 'dented' following UK's vote for Brexit
House prices: Mortgage figures 'point to market slowdown'
Latest mortgage lending data from the Council of Mortgage Lenders (CML) has confirmed a slowdown in transactions, which counter-intuitively is supporting house prices.
The trade body, whose members account for more than 95 per cent of all mortgages issued in the UK, revealed that £10.5bn was lent to buy or refinance property in October, says the Belfast Telegraph.
That means borrowing fell 11 per cent year-on-year, while the amount borrowed was down by a larger margin.
A total of £5.9bn was advanced to home movers, down nine per cent on September and 18 per cent year-on-year, and lending to first-time buyers totalled £4.5bn, down eight per cent and two per cent respectively.
However, those re-mortgaging their home borrowed £6.1bn, up 11 per cent on the previous month and seven per cent on a year ago.
"The data [were] seized upon as evidence that the EU referendum in June had dented confidence and a sign that home owners were responding to the Bank of England's rate cut… after the vote for Brexit," says The
The figures also broadly accord with survey evidence from the Royal Institute of Chartered Surveyors, among others, showing a drop-off in activity in recent months due in large part to existing homeowners staying put.
This is exacerbated by a slump in the buy-to-let sector, lending to which, the CML said, was down 20 per cent year-on-year.
However, buyers are returning to the market, with the result that purchase numbers are down but prices are continuing to rise, albeit at a slower rate.
Andy Knee, the chief executive of legal services provider LMS, said: “October was a strong month for the re-mortgage market, with activity hitting an eight-year high, while the rest of the market stood still."