The Bank of England has reported that net mortgage borrowing by households weakened to £3.9 billion in August, this followed a strong net flow of £4.5 billion in July.
Mortgage approvals for house purchase weakened to 65,500 in August, in contrast to the 18 month high of 67,000 in July. These also remained within the narrow range seen over the past three years.
Rob Barnard, sales director at Masthaven, said: “We have seen a downturn of lending in August, which may be in part led by the continued political uncertainty and the heightened chance of a no deal Brexit.
“However, despite the fall in net mortgage borrowing, the appetite for purchasing property has remained relatively strong keeping in line with the average seen since 2016.
“It seems that by and large, the market is not too concerned with the political turmoil of late. This is supported by our findings that in our Broker Beat research that found that 89% of brokers are confident about the prospects for their firm. The UK is still a desirable place to own a property and lenders are innovating to ease the application process for mortgages to deliver excellent customer service, paving the way for specialist banking to become the new norm.”
Kate Davies, executive director of the Intermediary Mortgage Lenders Association IMLA, added: “Mortgage lending remains consistent and stable in the face of ongoing uncertainty in Westminster. Borrowers are still keen to press ahead with their plans to step onto or up the housing ladder and our research shows that advisers remain confident about the future of the mortgage market.
“However, there are still challenges facing the sector that must be addressed. As a priority, we need to replace the Help to Buy scheme, which has supported over 220,000 housing transactions since 2013. The market is already responding by providing more options for first-time buyers, such as higher loan-to-value mortgages, but it can still be hard for younger buyers to meet the stringent requirements of the current affordability rules.
“We need more dialogue between lenders, builders, regulators and the Government to forge a coherent policy which supports responsible lending on good quality properties designed for younger buyers and those on lower incomes.”