Commenting on the data, Jackie Bennett, Director of Mortgages at UK Finance said “Overall remortgaging for both residential and buy-to-let properties have levelled out after a period of strong growth. This reflects the number of fixed rate loans reaching maturity. Buy-to-let home purchases have eased again in September, suggesting lending in this market remains subdued as a result of the recent tax, regulatory and legislative changes.”
“Demand for house purchases for both first-time buyers and home movers has also lessened, as affordability constraints continue to bear down on consumer demand for new loans particularly in London and the South East”.
John Phillips, Group Operations Director at Just Mortgages and Spicerhaart, said the figures show that Brexit uncertainty continues hit consumer confidence, and that is having a significant impact on the housing market and it will probably not start to recover until summer 2019. “Brexit, Brexit, Brexit. Whether it is Brexit itself, or, more likely, the uncertainty it brings, one thing is for sure – it is impacting the mortgage market. We have seen purchasing take a real hit over the past few months, and this is mirrored by UK Finances’ lending figures today, which show first-time buyer mortgages are down 4.5% on last year and home mover mortgages are down 8.4%.”
“In our business, remortgage is by far the strongest area of the business and is actually rising. The UK Finance figures show a drop, but it is a very small one 0.6%, which suggests remortgage is the strongest area of lending across the market. Buy to let has seen the biggest hit – an 18.8% drop, and while market uncertainty is sure to have affected this area too, it has probably been hit harder due to all the recent changes in the BTL market over the past 18 months.”
“I think that basically we will see this slow down continue, especially in the purchase market, until we have some sort of stability back. The Prime Minister said today that they are in the ‘final stages’ of negotiations, but still, no deal has been reached, and there is a real possibility of a no deal Brexit. Whatever happens, I think it will continue to affect the market until at least March. Then we will have a period of ‘wait and see’ when people start to get their heads around what, if any, impact the final deal has. So in all likelihood, it will probably be summer next year before we see the market start to recover.”
Richard Pike, Phoebus Software sales and marketing director, says “We have seen a downward curve with mortgage transactions falling month on month across the board. Unfortunately, this was always going to be the case the closer we get to the final Brexit deadline. According to the Bank of England household sentiment is fairly buoyant as wage growth rises above inflation. However, when it comes to the wider economy most people are much less confident as we wait in limbo for the outcome of Brexit negotiations. The brakes have definitely been applied with regards to purchasing and once again our industry will be relying on remortgages to keep its head above water.”
“At the risk of sounding like a broken record, we are in for a rocky few months. Until we know what kind of a deal we will secure with the EU it is safe to say that people will remain cautious and that is likely to be reflected in the number of property sales.”