The CML estimated that gross mortgage lending hit £18.2bn in May, up 4% on April’s total. It suggested this would have been higher, but for the slew of buy-to-let mortgages that were shovelled through the market, ahead of the changes to Stamp Duty in April.
Keen to strike a positive note amid the present pandemonium, Adam Tyler, chief executive at the National Association of Commercial Finance Brokers, said: “Current market and politico-economic volatility could benefit buy to let, as investors once again look to bricks and mortar as a safe port in a storm, despite the new entry premium. The fact that Bank Rate is now more likely to go down than up in the near term will provide further support to the property market.”
CML senior economist Mohammad Jamei said: “As expected, lending continued to be somewhat dampened in May, reflecting the earlier rush in the first quarter to beat the Stamp Duty change on second properties.”
He added: “There is likely to be considerable uncertainty as a result of the EU referendum decision. We expect this to affect sentiment and reduce activity below levels that would otherwise be expected in the near term, as both buyers and sellers adopt a wait-and-see attitude until the dust begins to settle.”
This view was echoed by others across the market and Richard Pike, sales and marketing director at Phoebus Software, commented: “Many will also have to take stock to understand how the fall in the stock market affects their investments and pensions, which may also have a knock on effect on the housing market.”
Despite the uncertainty created by the vote to leave the European Union, the CML believes the issue of under supply in the UK’s housing market will help underpin values and prevent property prices from falling.