Gross mortgage lending across the residential market in September was £21.5bn, some 1.2% lower than last September, UK Finance’s Household Finance Update has found.
The number of mortgages approved by the main high street banks in September was 9.1% lower than last September; approvals for house purchase were 10.1% lower, remortgage approvals were 7.4% lower and approvals for other secured borrowing were 9.8% lower.
Eric Leenders, managing director of personal finance, UK Finance, said: “The mortgage market softened slightly in September, following strong remortgaging activity in the months preceding the recent base rate rise.
Vikki Jefferies, proposition director at PRIMIS and PTFS, added: “The subdued market for property sales is offset by a vibrant remortgage market as homeowners look to bring certainty to their financial outgoings with Brexit looming and August’s rate rise fresh in the memory.
“The rising household debt burden is a concern, but it will remain a manageable one for most families as long as interest rates remain low.
“When levels of uncertainty are heightened, customers turn to their financial advisers to get a sense of how to successfully navigate the financial situation, which will feed through into increasing applications for remortgaging and protection products, especially income protection.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, blamed Brexit for the subdued mortgage market.
He said: “This softening of the mortgage market in September comes as no great surprise as Brexit uncertainty is causing a number of borrowers to defer making decisions.
“As soon as we have a definite deal, whatever that may look like, we expect to see a bounce as people finally make the decisions they have been deferring.”
Meanwhile Jeff Knight, marketing director for Foundation Home Loans, highlighted market uncertainty and looked to the Budget for clarity for landlords.
He said: “The market may seem fairly flat on the face of it, as households continue to be squeezed by inflation and perplexed by market uncertainty.
“That said, as we head into the winter months viewings and finance applications may increase as prospective buyers prepare to make final decisions. For sellers, it’ll be a case of accepting offers this side of the year, to avoid the market grounding to a complete stand still.
“With the Budget looming and rumours stamp duty will either be banded, overhauled or risen, buy-to-let landlords will be hoping for clarity to safeguard this side of the market.
“For now, the remortgaging market moves steadily on as landlords enjoy more specialist offers from lenders to mitigate this uncertainty, and this should maintain momentum for the months ahead.”
John Phillips, group operations director at Just Mortgages and Spicerhaart, added: “These figures suggest that the current political uncertainty is continuing to have a negative impact on the housing market while the upcoming Budget – which may include further housing incentives – may also be a factor in why things have slowed down as people wait to see if it is worth waiting until after Monday before making any big decisions.
“The fact remortgaging has dropped, however, is the main difference here as house purchase figures have been falling for a while. There was a flurry of remortgage activity in the months preceding the recent rise, so the fact remortgage is down, is likely to do with that more than any marked trend.”