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Mortgage lending cools in June as Brexit ‘rocked housing market’

by: Paloma Kubiak
  • 29/07/2016
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Mortgage lending increased by 3.3% in the 12 months to June to total £19.3bn, but lending and loan approvals were down compared to the six-monthly average, official Bank of England statistics reveal.

While gross mortgage lending was up on a year earlier, monthly growth of £3.3bn recorded in June was lower than the average of £3.5bn recorded over the past six months.

Mortgage loan approvals dipped to reach 64,766, compared with the average of 69,998 in the previous six months.

However, remortgaging enjoyed steady growth with approvals hitting 43,102 in June, up on the average of 41,592.

Peter Williams, executive director of the Intermediary Mortgage Lenders Association (IMLA), explained that Brexit-linked uncertainty had “rocked the housing market” in June.

“Unsurprisingly, house purchase lending activity fell back, with many buyers choosing to wait out the vote and see if the result would land in their favour,” he said.

“Bucking the wider market trend, the remortgage market continued in fine form in June, with homeowners making the most of the competitive rates available and switching to better deals. Some of these remortgagors will be landlords looking to counteract the added tax burdens handed to them in recent month from the Stamp Duty Land Tax reforms, changes to the wear and tear allowance, and the upcoming squeeze on interest relief. Others will be homeowners looking for a boost to their finances while wage increases remain lacklustre.”

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