Mortgage lenders note that demand for home purchases and refinancing increased in the second quarter, but expect a decline in the next quarter, according to a study by the Bank of England.
Lenders gave a net percentage balance score of 14.9% to demand in the second quarter, but expect this to be -23.2% in the third quarter.The Bank’s Credit Conditions Survey.
according to lenders prime loans demand was 23.8% in the second quarter, compared to expectations of -23.2% in the third quarter.
Demand for refinancing was 45.5% in the second quarter, with forecasts of -20.5% in the third quarter.
Demand for buy-to-let mortgages followed a similar pattern, with a score of -1.3% in the second quarter expected to deteriorate to -31.7% in the third quarter.
The changes in balances are described as an ‘increase’ if they are greater than 10 in absolute terms, ‘small’ if they are between five and 10 and ‘unchanged’ if they are less than five.
The availability of mortgages for borrowers with a low Loan-to-Value (LTV) ratio of 75% or less declined in the second quarter but is expected to improve in the third quarter, while the availability of mortgages for borrowers with a high LTV was stable in the second quarter and is expected to remain flat in the third quarter.
Lenders reported that default rates on secured loans to households were unchanged in the second quarter and were expected to remain unchanged in the third quarter.
Propertymark CEO NAthan Emerson said: “More stable levels of secured debt, such as mortgages, generally indicate that there has not been a sudden or harsh shift in consumer confidence.
“The figures indicate that many households have weathered the current geopolitical tensions in the Middle East with remarkable strength, possibly helped by inflation which has recently dipped and base rates which have not seen any increase.
“The recent uncertainty within the global economy has added a degree of caution to financial security for many people, and with some of the UK government’s policies effectively on hold until there is clarity on the next Prime Minister, the next twelve months could prove essential to watch closely.”