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Consumer Credit

Mortgage sales down 15% as Brexit bites

By CreditMan Tuesday, August 23, 2016

Confidence in the property market has waned following the Brexit vote, with mortgage sales falling 15.7% (£2.5bn) last month, according to the latest analysis from Equifax Touchstone. Year-on-year, sales are down 16.6% (£2.7bn).

Residential mortgage sales fell by 15.8% (£2.1bn) on June, while buy-to-let sales dropped by 15.2% (£0.4bn). Year-on-year residential sales were down 9.7% (£1.2bn) while buy-to-let sales tumbled by 39.1% (£1.5bn).

Every regional area apart from the North West (-7.6%) showed a double-digit decline, with Northern Ireland (-28.7%) and Scotland (-21.5%) showing the sharpest falls. London dropped by -13.5%.

The data from Equifax Touchstone, which covers 92% of the intermediated lending market, shows that the average value for buy-to-let mortgages is also down year-on-year, falling from £160,203 to £157,195. The average value of residential mortgages in July was £188,053 compared to £186,897 in July 2015. Iain Hill, Relationship Manager, at Equifax Touchstone, said: “Following Brexit, the UK housing market has been on tenterhooks, waiting to see how hard property buyers’ confidence has been hit. It’s important to remember that the summer period traditionally brings a dip in mortgage sale volumes during July and August, so it will be many months before the full effect of Brexit is uncovered.

“We’re confident that the market will bounce-back longer-term, with negativity likely to be offset by the recent interest rate cut, leading to lower and more competitive rates from lenders.”

Equifax Touchstone utilises intermediary and customer profiling tools to provide financial services providers with a detailed understanding of their marketplace and client base.