Mortgage lending is forecast to grow by 3.7% both this year and in 2020, according to the EY ITEM Club Outlook for financial services.
Though better than in recent years, it remains down on pre-financial crisis rates despite historically low interest rates and favourable mortgage lending terms.
The proportion of new mortgage lending at LTV ratios at or above 90% reached a post-crisis high of 18.7% in Q1 2019.
Omar Ali, managing partner at EY’s UK Financial Services, said: “Brexit, the global economic environment, and broader political uncertainty is resulting in many consumers and firms holding back on big spending plans.
“Even if the withdrawal deal is ratified early next year, this won’t get rid of the uncertainty entirely as the UK’s future relationship with the EU will still need to be worked out.
“For firms relying on trade with the EU, this is likely to hold back their spending and, in turn, their appetite for credit.
“For consumers, it may mean they’re less likely to splash out on big ticket items like buying a house or car.”