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Mortgage lending slips as market uncertainty continues

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Mortgage lending in June was down on both May’s total and the figure from June 2018, according to the latest data from UK Finance.

The trade body’s figures show £21.9bn was lent in June, down four per cent compared to June 2018 and down 1.7 per cent on May.

There was a small positive to the latest set of data with the number of mortgage completions up slightly, compared to last year, but down 3.3 per cent on May.

However, this data comes only from the banking groups of Barclays, Lloyds, HSBC, RBS, Santander UK, TSB and Virgin Money.

June saw 48,539 mortgages completed for home purchase by these banks – up from 47,175 in June last year, but down from 49,683 in May this year.

Remortgage completions were down against both comparisons.

Positive home purchase figures

Mark Harris, chief executive of adviser firm SPF Private Clients, highlighted the uptick in the number of mortgages for home purchase, despite all the continued uncertainty over Brexit.

“Hopefully, the installation of a new prime minister at number ten will effect a positive change for the wider economy and housing market, although it is still very early days,” he said.

“Swap rates continue to fall, with a number of lenders, including Nationwide, NatWest and Accord cutting some mortgage rates in the past week.

“This downward pressure on pricing is likely to continue as lenders compete for business.”

Andrew Montlake, director at mortgage broker Coreco, echoed those sentiments but noted the less positive figures from HMRC.

“There was clearly a lot less confidence in the first quarter, as this week’s HMRC data showed home sales in June were down by 16.5 per cent compared to last year,” he said.

“The UK’s economic fundamentals remain strong but the effect of the Brexit countdown on confidence is likely to prove stronger in the months ahead.

“A lot of people will also be waiting for any policy changes that could improve their position under Boris Johnson, especially in relation to stamp duty.”

He added that the broker firm expected to see a pick-up in remortgage activity in August and September “given that the likelihood of a no-deal exit from the EU has now ramped up significantly”.


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