Mortgage applications up 55% since rate cut
Week-on-week mortgage enquiries have increased by an average of 55% since the Bank of England cut interest rates from 0.5% to an historic low of 0.25% earlier this month, according to deVere Mortgages.
Mike Coady, managing director of deVere Mortgages, attributed the uptick in enquiries directly to the BoE’s rate cut on 4 August that was aimed at cushioning the UK from a post-Brexit vote recession.
Coady said: “This is one of the biggest surge in mortgage enquiries we’ve received since deVere Mortgages was launched as a standalone brand in 2015.
“The decision by the Bank of England to cut interest rates has, we believe, acted as a catalyst for many individuals to now actively enquire about a mortgage. It has created something of a feel-good factor in the market, especially for British expats.
“Before the Brexit vote many people had been delaying taking action until the referendum result was revealed so they could see how the land lies; and this interest rate cut has now provided extra impetus to act now to secure a home loan.”
He also pointed to the slowing of property price growth as another factor for the increase.
He said: “It is not just the interest rate cut that is stirring borrowers into action. It also comes against a backdrop of price increases having slowed substantially a few months, including in areas such as London, East Anglia, the North of England and the West Midlands.
“Furthermore, property in the UK is still in high demand from overseas buyers, mainly due to the major underlying strengths of British property investments; the plummeting post-Brexit pound which makes buying property in the UK with foreign currency less costly than before; and because some sellers have been being apprehensive since the Leave victory, and as such, are prepared to accept lower offers.
“These are, naturally, all attractive trends for would-be buyers, and, as such, coupled with the latest interest rate cut, the level of mortgages enquiries has continued to rise.”
Mike Coady goes on to say: “I fully anticipate this surge in mortgage enquiries to continue as more and more people in the UK and overseas begin to take action following Brexit and the BoE’s measures to recession-proof the UK.”
deVere Mortgages works with a comprehensive and wide range of UK-based and international mortgage lenders, thereby offering clients a wide range of products to suit their individual requirements.