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|CML Gross Mortgage Lending for July - commentary|
|Thursday, 25 August 2016|
Responding to the CML release, Henry Woodcock, principal mortgage consultant at IRESS, said: “The momentum built by first time buyers and those remortgaging has plateaued in July with gross mortgage lending stable at £21.4 billion in July – only very slightly down from £21.5 billion in June.
“After the EU referendum the housing and mortgage markets largely shook off the short-term uncertainty and quickly got back to business as usual.
“While the overall picture is stable, an interesting and unexpected regional housing outcome from Brexit is that there appears to be a ‘confidence correlation’ between areas that voted to remain compared to those that voted to leave. There seems to have been a positive effect on the housing market in the areas of the Country that voted for Brexit whereas areas that voted ‘Remain’ have seen a corresponding dip in activity.
“There has been some housing sunshine for first time buyers around the UK with Wales, Scotland, Northern Ireland and London all seeing increased borrowing in the second quarter. Landlords filled their boots earlier to beat the stamp duty changes in April and the buy to let market has since stalled somewhat. This has resulted in more starter homes being snapped up by first time buyers eager to bag a ‘do-up’ bargain.
“Although there was speculation on the 0.25% base rate cut, borrowers already had access to a range of attractive low interest rate deals, with 10-year fixed rate mortgages as low as 2.39%. As rates have fallen the market has been flooded with many more mortgage products as a result of fierce competition.
“Uncertainty around future rate movements and steady house price increases means that now might be a good time for borrowers to grab a deal. Many of the smaller and ‘do-up’ properties that appeal to buy to let landlords also have the same appeal to first time buyers.”
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