Fears that the housing market would suffer following the Brexit vote were “wide of the mark”, according to the Council of Mortgage Lenders, as figures for August found lending increased by 7 per cent.
Gross mortgage lending reached £22.5bn in August, according to the CML, up from the £21.1bn of lending approved in July and the highest August figure since 2007, when gross lending reached £33.6 billion.
The figure also represented an annual rise, up 15 per cent compared to August 2015 when mortgage lending totaled £19.5bn.
Senior economist at the CML, Mohammad Jamei, says: “Widely voiced fears in recent months about the housing market have proved to be wide of the mark.
“Prospects for house purchase activity post-referendum look slightly subdued, when compared to late 2015 and early 2016. However, sentiment in the market recovered in August. This is reflected in stronger-than-expected transaction figures, and in our gross lending estimate.”
He says the recovery is likely to be down to a number of factors, including the Bank of England’s monetary stimulus and its introduction of the Term Funding Scheme in August.
“A subsequent uptick in approvals is anticipated, albeit still at levels lower than earlier this year as affordability constraints and lack of properties on the market for sale continue to bear down on borrowers,” says Jamei.
Marketing director at Phoebus Software Richard Pike says: “Now really is the time to take advantage of the lowest mortgage interest rates on offer.”