Brexit fears did not affect overall mortgage lending in June, survey shows

rexit fears did not affect overall mortgage lending in June, survey shows [Photo: miluxian via iStock]

The fears over the potential for a Brexit vote may have been predicted to have a slowing effect on British property in the early part of the year as fewer people chose to buy homes, adopting a wait and see approach instead, but it would appear this effect was not as strong as many would have expected. 

According to the latest data surrounding the property market, June actually saw an impressive rise in the number of mortgages being afforded to buyers, indicating that even in the run-up to the eventual Brexit decision, Brits were still looking to get onto, or move up, the housing ladder. 

Data published this week by the Council of Mortgage Lenders (CML) shows that in June this year, gross mortgage lending across the UK reached as high as £20.7 billion. Far from falling in the weeks before the referendum, this figure actually represents significant growth, with a 16 per cent increase month-on-month when compared to the £17.8 billion that was loaned to home buyers in May. 

There was also a surprising year-on-year increase, with three per cent more money being approved for mortgages in June this year than there was in the same month one year ago. 

In fact, June's total mortgage lending was actually at the highest this month has seen in any year since 2008, when there was £22.8 billion loaned to buyers. 

However, quarter-on-quarter, there was a marked fall in mortgage lending. While the total lending for the quarter was eight per cent higher than it was in the three months at the end of last year, it was ten per cent below the total seen in the first quarter of this year, although that could be down to the rush of activity in March from landlords looking to buy before the three per cent Stamp Duty levy deadline on April 1st. 

CML senior economist Mohammad Jamei said that while it is still expected that activity will slow a little post-Brexit vote, this data shows that the property market starts in a good position from which it can hold firm in the coming months. 

"As with the economy, the UK housing market’s starting position is relatively favourable, with transactions having increased by almost 80% from post-crisis lows. Over the next six months, activity is likely to soften modestly, while lending will be driven more by remortgaging and less by house purchases," he said.