Mortgage lenders found demand for residential purchases and remortgages rose in the second quarter but expect a decline in the following quarter, according to a study by the Bank of England.
Lenders gave a net balance percentage of 14.9% for demand in the second quarter, but expect it to reach -23.2% in the third quarter, according to T.Survey of the bank’s credit conditions.
The lenders said Prime lending Demand was 23.8% in the second quarter, compared to expectations of -23.2% in the third quarter.
Demand for real estate refinancing reached 45.5% in the second quarter, with expectations of -20.5% in the third quarter.
Buy-to-let mortgage demand followed a similar pattern, with the result expected to worsen by -1.3% in Q2 to -31.7% in Q3.
Changes in balances are described as “increased” if they are greater than 10 in absolute terms, as “slight” if they are between five and 10, and as “unchanged” if they are less than five.
Availability of mortgages to borrowers with low loan-to-value ratios decreased by 75% or less in the second quarter but is expected to improve in the third quarter, while availability of mortgages to borrowers with high loan-to-value ratios was stable in the second quarter and is expected to remain the same in the third quarter.
Lenders reported that default rates on loans secured to households were unchanged in the second quarter and are expected to remain unchanged in the third quarter.
Propertymark CEO N“More stable levels of secured debt, such as mortgages, generally indicate no sudden or sharp shift in consumer confidence,” Emerson said.
“The figures tend to show that many households have weathered the current geopolitical tensions in the Middle East with remarkable strength, perhaps supported by inflation which has been falling recently and key interest rates not seeing any increases.
“The recent uncertainty within the global economy has added a degree of conservatism regarding financial certainty for many people, and with some UK Government policies effectively on pause until there is clarity on the next Prime Minister, the next 12 months may be necessary for closer scrutiny.”
