In contrast, lenders reported that demand for remortgaging deals decreased significantly over the quarter, though they suggested it would increase slightly in the next three months.
Despite the increase in demand for purchase deals, the survey revealed that lenders reported a slight reduction in the availability of secured credit during the second quarter. Again though this was predicted to increase over the next quarter.
The last three months have been profitable for mortgage lenders, with spreads having “increased significantly”. What’s more, lenders predicted they will widen further next quarter.
Lenders reported a drop in defaults too, with this also expected to continue.
The Brexit slingshot
Michael Biemann, chief executive officer of Selina Finance, suggested that the jump in demand for purchase lending reflected the “Brexit deadline slingshot effect”.
He explained: “When the March 29th Brexit deadline passed, people decided that they couldn’t put their lives on hold indefinitely for something that might never happen.”
However he cautioned that with the likelihood of a no-deal Brexit having now increased significantly, confidence could now fall back.
Andrew Montlake, managing director of Coreco agreed that passing the initial Brexit deadline had proved a “symbolic moment” for the property market, with sentiment among buyers quickly shifting to a more positive outlook.
He added: “Looking forward, lenders are clearly more optimistic than some about the trajectory of demand in the third quarter. If demand for house purchases remains unchanged given the potentially turbulent months ahead, then that will be a considerable achievement.”