Mortgage lending rocketed to an eight-year high before last month's EU referendum as the housing market showed few signs of pre-vote jitters
Figures released by the Council of Mortgage Lenders (CML) showed £20.7bn was dished out to homebuyers and re-mortgagers in June – 16 per cent more than in May.
The figure was an eight-year high for the month of June, as analysts were divided as to what extent the industry would feel the brunt of any post-Brexit slowdown.
“The result of the EU referendum is likely to affect the housing market,” said Mohammad Jamei, senior economist at the CML. However, “there remains considerable uncertainty” over what that effect will be, he added.
Separate data from HM Revenue and Customs (HMRC) this morning also showed little sign homebuyers were put off ahead of the vote. The number of transactions for residential property in June jumped five per cent between May and June to 94,550.
Sales completions were still down on June last year, though this was largely attributed to the near 80 per cent jump in sales volumes in March 2016 as second-home buyers rushed to beat stamp duty changes. Over the first six months of the year, transactions are up ten per cent on 2015.
Industry figures latched on to the numbers as signs of the fundamental health of the UK housing market, as economists warned of bumpy times ahead.
Residential property transactions
|Year to date||595,540||658,150|
“Property transactions entered the summer with momentum – exactly what the industry needs now,” said Andrew Bridges, managing director of estate agents Stirling Ackroyd.
Estate agent Jeremy Leaf, a former chairman of the Royal Institution of Chartered Surveyors (RICS) said: “The fundamentals are still there. It is clear that people still want to get on.
“Lenders still seem keen to lend, which will help support the market, while it looks as though the next move in interest rates will be downwards, making mortgages cheaper still and providing a further boost.”
However, Howard Archer, an economist at IHS Markit warned: “Housing market activity and prices look to be at very serious risk of an extended, marked downturn following the UK’s vote to leave the EU.”