More mortgages were approached for home purchases by the main high street banks in May, reaching its highest level since June 2016, UK Finance’s Household Trends Update has found.
The number in May was 9.1% higher than in the same month in 2018. Meanwhile gross mortgage lending across the residential market in May 2019 was £21.9bn, some 0.4% lower than the same month in 2018.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “The increase in mortgages for home purchase, rising to the highest level in three years, is hugely encouraging when you consider the political uncertainty which is causing many people to put decisions to move on hold.
“It suggests a much more resilient market than one might expect, and once a decision is made over Brexit, one way or another, we are likely to see a further uptick in transactions as pent-up demand is released.
“Lenders remain keen to lend and several have cut rates in recent weeks so mortgage rates are likely to remain low for a while yet, further supporting the market.”
Andrew Montlake, director of Coreco, added: “There has been a slingshot effect on confidence in the wake of the March 29 Brexit deadline. Brexit fatigue has well and truly taken root.
“People who had put everything on hold in the run-up to Brexit Day said enough is enough in April and May and started to get on with their lives
“We have seen a noticeable pick-up in home purchase activity since April and this is reflected in the three-year high in mortgage approvals in May.
“The fundamental reasons why people move do not go away and they are starting to outweigh concerns about the state of the economy and property market post-Brexit.
“Home purchases are stronger outside London, because the capital is more leveraged on Brexit and prices remain high despite recent falls.”
Remortgage approvals were 3.7% lower and approvals for other secured borrowing were 5.9% higher than the same month a year earlier.
Montlake said: “The decline in remortgage activity levels is a positive more so than a negative. People have been proactively remortgaging for some time now and a lull is inevitable.”
John Goodall, chief executive of Landbay, had mixed feelings about the data.
He added: “It was another slow month for mortgage lending, with a potent cocktail of poor consumer confidence and subdued house prices.
“However, it’s heartening to see a rebound in the number of mortgage approvals; demand continues to shine through even in challenging political and economic circumstances.
“For borrowers, the current landscape of low-interest rates, stable inflation and impressive wage-growth should lend some breathing space to their budgets, meaning things are looking up as we move into the second half of the year.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “Looking forward, it remains to be seen how many of these approvals turn into completions but the fact that they are approaching the seasonal norm must be encouraging news.”