Mortgage lenders found that residential purchase and remortgage demand rose in Q2 but expect a drop in the next quarter, a survey from the Bank of England says.
Lenders gave a net percentage balance score of 14.9% to demand in Q2, but expect that to be -23.2% in Q3, according to the Bank’s Credit Conditions Survey.
Lenders said prime lending demand was 23.8% in Q2, compared to expectations of -23.2% in Q3.
Remortgaging demand was 45.5% in Q2, with predictions of -20.5% in Q3.
Buy-to-let mortgage demand followed a similar pattern, with a score of -1.3% in Q2 expected to worsen to -31.7% in the third quarter.
The changes in balances are described as an ‘increase’ if greater than 10 in absolute terms, as ‘slight’ if between five and 10 and as ‘unchanged’ if less than five.
The availability of mortgages for borrowers with low loan to value (LTV) ratios at 75% or less decreased in Q2 but was expected to improve in Q3, while the availability of mortgages for high LTV borrowers was stable in Q2 and expected to remain the same in Q3.
Lenders reported that default rates on secured loans to households were unchanged in Q2, and were expected to be unchanged in Q3.
Propertymark chief executive Nathan Emerson said: “More stable levels of secured debt, such as mortgages, generally indicate there has been no sudden or harsh shift in consumer confidence.
“The figures lean towards demonstrating many households have weathered current Middle Eastern geopolitical tensions remarkably robustly, potentially helped by inflation seeing a recent dip and base rates not seeing any increases.
“Recent uncertainty within the global economy has added a degree of reservation regarding financial certainty for many people, and with some UK Government policy effectively being paused until there is clarity on the next Prime Minister, the next 12 months may prove essential to closely scrutinise.”
Disclaimer: This story is auto-aggregated by a computer program and has not been created or edited by finopulse.
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