Lenders have reported that demand for secured lending for house purchase increased significantly in Q2, and was expected to remain unchanged in Q3, the Bank of England’s Credit Conditions Survey has found.
However, demand for secured lending for remortgaging decreased significantly in Q2. This was expected to increase slightly in Q3.
Andrew Montlake, managing director Coreco, said: “Passing the March 29 Brexit deadline was a symbolic moment for the UK property market.
“Sentiment among prospective buyers shifted very quickly from apprehension to a more positive mindset.
“The sharp strengthening in demand for house purchases during the second quarter reflects this shift in sentiment, and the broader Brexit pragmatism that took root.
“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.
“We are at a pivotal point in the Brexit endgame and a no-deal Brexit is now looking far more likely.
“As we enter uncharted waters, the impact of a no-deal Brexit on demand for property is anyone’s guess.”
Overall spreads on secured lending to households, relative to the bank rate or the appropriate swap rate, were reported to have increased significantly in Q2, and they were expected to widen in Q3.
Lenders reported that the availability of secured credit to households had decreased slightly in the three months to end-May 2019 (Q2) but was expected to increase over the next three months to end-August 2019 (Q3).
The availability of unsecured credit to households was reported to have decreased slightly in Q2 and was expected to remain unchanged in Q3.