Gross mortgage lending across the residential market in January 2019 was £21.6bn, down 1.5% year-on-year, UK Finance’s household lending and deposits report has found.
The number of mortgages approved by the main high street banks in January 2019 was 0.3% higher than the same month the previous year; approvals for home purchase were 1.5% higher; remortgage approvals were 3.1% lower and approvals for other secured borrowing up 6.8%.
Jeff Knight, marketing director for Foundation Home Loans, said: “As we edge towards March 29, some buyers have pulled the brakes on the purchase process – though given continued interest from first-time buyers, it’s not quite been enough to halt activity entirely.
“In fact, specialist cases have increased their share of the market, with lenders able to develop more bespoke offerings that are better suited to this climate.
“However, those a little more concerned about moving in the short-term may opt to remortgage, locking in low rates to help manage the chances of an interest rate rise later this year.”
Dilpreet Bhagrath, mortgage expert at Trussle, agreed Brexit uncertainty has had a clear effect on the housing market.
She said: “It’s clear that current economic uncertainty is casting a shadow over the property market. Those hoping to move seem to be most affected, adopting a wait-and-see approach while Brexit looms.
“Remortgaging activity is also down slightly, but is continuing to tick over as expected as many homeowners seek to lock in a fixed-rate deal with a view to riding out any potential rate rises linked to Brexit.
“The ongoing shortage of available homes is limiting options for buyers in some areas, but there are some good deals to be had particularly for first-time buyers who are ready to move quickly.
“Those who do find their dream home might want to consider a fixed-rate mortgage if they want to know exactly how much they’ll be paying each month, avoiding instability and providing extra piece of mind.”
Richard Pike, Phoebus Software sales and marketing director, said: “Overall lending in January was 1% down on the same month last year but more starkly it was 9% below the previous six-month average.
“We are not very often surprised by the figures these days, and to be honest the picture the figures paint for January is probably more encouraging than we might have hoped.
“Unfortunately, there is nothing going on in Westminster or in Europe that is helping to alleviate the situation, and neither will it for some time. However, there is a resilience that shows there are still people that want, and need, to buy and nothing in the political arena will change that.
“The next few months will be telling, we could be looking at an even less rosy picture in a couple of month’s time, or we will see that despite uncertainty people carried on regardless.”