UK homeowners borrowed £10.6bn in July, a 13% month-on-month drop
According to recent data from the Council of Mortgage Lenders (CML), UK homeowners borrowed £10.6bn in July, down 13% compared to the previous month.
The number of loans dropped by 14% month-on-month, down to 58,100.
The biggest drop in borrowing was amongst first-time buyers. They borrowed £4.4bn in July, 19% less than they borrowed in June, with the typical loan size dropping to £133,000 in July from £135,700 in June.
Home movers borrowed £6.2bn, down 9% on June and 16% compared to a year ago. The average amount borrowed by home movers in the UK increased to £171,400 in July from £171,000 in June.
Number of loans to home-owners, 2007-2016:
Remortgage activity increased 7% in July compared to the previous month, up to £6 billion – 20% higher than a year ago.
Landlords borrowed £3 billion in July, an increase of 3% month on month but down 21% compared to the same month in 2015.
Paul Smee, director general of the CML, said that it is uncertain whether the figures reflect an uncertain reaction to the Brexit vote or a sign of a market already cooling.
“These figures cover the first full month of lending following the EU referendum. They show a month on month decline in first time buyer and home mover activity and muted activity on the buy to let market,” said Paul Smee.
“It is hard to determine whether these figures reflect a first uncertain reaction to the referendum vote, or are a sign of a market which was already cooling. It will be quite some time before a full assessment can be made,” he added.
“We do believe that the Buy-to-let lending market is still readjusting after the large level of activity before the changes to stamp duty on second properties in April. Remortgage lending on the other hand has continued to grow, and reacted with a seven year monthly high. Borrowers seem keen to take advantage of the wide range of competitive deals in the market and, following the base rate cut in August, this is likely to continue.”