According to Equifax Touchstone, the mortgage lending total in July was 39% down on the same month a year ago. The stamp duty hike in April certainly has had some bearing on this. What is not clear, is if it is mainly due to purchases being made earlier than planned to avoid the hike or if this has now been absorbed by the market and is more of a general drop.
Also, the average value for buy-to-let mortgages is down year-on-year, falling from £160,203 to £157,195. This is interesting because generally house prices have gone up so is this just a statistical value or a trend to show people are looking to buy cheaper properties?
The fact that mortgage sales were down 15.2% vs June has probably more to do with seasonal fluctuations (people on holiday) than anything more major.
“Following Brexit, the UK housing market has been on tenterhooks waiting to see how hard property buyers’ confidence has been hit. It’s important to remember that the summer period traditionally brings a dip in mortgage sale volumes during July and August, so it will be many months before the full effect of Brexit is uncovered” explains Iain Hill, relationship manager at Equifax Touchstone.
“We’re confident that the market will bounce-back longer-term, with negativity likely to be offset by the recent interest rate cut, leading to lower and more competitive rates from lenders” he says.
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