“Conclusive evidence on the state of the mortgage market will be hard to come by for some months following the triple whammy of stamp duty reform, the Brexit vote and the first base rate change since 2009. All of this, plus the summer holiday season, means we will be waiting for some time to determine the shape of things to come in the second half of the year.
“Nevertheless, lending conditions remain favourable with product availability continuing to improve and rates continuing to reach new lows. Remortgage activity in particular is setting the pace with strong competition giving many consumers an incentive to explore lower repayments in the full understanding that rates won’t go much lower.
“In the purchase market, first time buyer activity looks on the surface to have held up better than homemover or buy-to-let when you compare the number of July loans made this year and last. However, there are warning signs for policymakers lurking beneath the surface. Income multiples have crept up and with first time buyers spending less of their household income on repayments, this suggests that higher earners are making headway while others may find themselves locked out.
“Today’s average first-time buyer is contributing a 15% deposit, but there are serious questions to be asked about whether the looming end of the Help to Buy mortgage guarantee will push this figure up and limit options for those with 5% or 10% deposits. Despite Brexit being a government priority, Westminster cannot afford to put off action to ensure that access to homeownership is supported for the long term. The new Chancellor needs to deliver in his Autumn Statement in November.”
For further information please contact:
Andy Lane / Tora Turton / Maham Uzair / Will Muir, Instinctif Partners, 020 7427 1422 / 29