Brexit has not hit mortgage borrowing demand, according to figures from the British Bankers’ Association.
Gross mortgage borrowing this month is at £12.6bn, up by 6 per cent compared to July 2015. Net mortgage borrowing is also 3 per cent higher than last year.
Yorkshire Building Society head of corporate affairs Tanya Jackson says: “These figures suggest that people’s desire to own a property largely outweighed any uncertainty caused by the EU referendum in July.
“That said, the full effects of the vote are unlikely to be seen until a few months after the outcome of the vote was announced, as those buying a home in July are likely to have begun the house buying process before the EU referendum.”
Approval of home purchases is down 19 per cent from July 2015, though the first seven months of 2016 has seen a 2 per cent increase compared to the same period in 2015.
Remortgaging approvals are 6 per cent higher than in July 2015 and 21 per cent higher in the first seven months of 2016 than they were during this period in 2015. Other advances are 19 percent higher than this time last year.
Commenting on the figures, LMS chief executive Andy Knee says: “In the month since the UK voted to leave the European Union, the latest BBA figures suggest home buyers took stock, with the number and value of house purchase approvals down compared to the previous month and year-on-year. The value of loans for house purchases also fell to its lowest level since March 2015 following a buoyant first six months of 2016, but what remains to be seen is whether this will become the norm or if August activity will be bounce back following the immediate shock.”
Knee adds that remortgaging is up 13 per cent by value and 6 per cent by number of approvals year-on-year as existing homeowners capitalise on the record low mortgages available.
He says: “Anecdotally, there is little to suggest a lull in the demand for house purchase and remortgaging. We therefore expect activity to bounce back in the autumn months once the dust settles and some sense of normality returns.”