Despite the uncertainty surrounding the EU referendum vote gross mortgage lending climbed 16% to reach £20.7bn in June, up from £17.8bn in May.
Gross mortgage lending reached £20.7bn last month which was the highest June figure for eight years, Council of Mortgage Lenders figures show.
Despite the uncertainty surrounding the EU referendum vote gross mortgage lending climbed 16% to reach £20.7bn in June, up from £17.8bn in May.
Mohammad Jamei, CML senior economist, said activity will modestly soften in the next six months due to the Brexit vote.
He said: “Although mortgage firms have ample lending capacity, activity levels are likely to bear the brunt of any market adjustment over the next six months or so, as buyers and sellers wait to get a clearer idea of where we might be headed.
“But as with the economy, the UK housing market’s starting position is relatively favourable, with transactions having increased by almost 80% from post-crisis lows.
“Over the next six months, activity is likely to soften modestly, while lending will be driven more by remortgaging and less by house purchases.
“We also expect some form of monetary easing to be undertaken by the Monetary Policy Committee when it meets on 4 August, given the uncertain outlook that has set in after the vote result.”
In the second quarter as a whole £56.1bn was lent, 10% lower than the first quarter but 8% higher than the second quarter of 2015.
Henry Woodcock, principal mortgage consultant at IRESS, said: “The positive indicators were there if one looked beyond the rhetoric of the daily bombardment of contradicting referendum messages.
“Mortgage lenders stayed calm, rates stayed low and many lenders looked to build market share with competitive deals.
“One month on from the leave vote, rates are predicted to stay low for another two years. Investment in the mortgage market continues with new lenders such as Atom Bank and others coming to market in the next six to 18 months.”
He added: “House prices have not dropped drastically. In fact, figures from the Office for National Statistics released on Monday show the average house in the UK now costs a record £211,000, up 8.1% on a year ago.
“We could continue to see an increase in lending over the coming months, but the longer-term lending outlook remains a bit ‘foggy’.
“The EU exit decision came as a surprise to many and a lot will now depend on how things settle following the initial jolt.
“The consultancy Centre for Economics and Business Research has suggested a construction slowdown may be on the horizon – which will only exacerbate the housing crisis and could lead to fewer affordable houses being built.
“We are in uncharted waters making things very hard to predict with any amount of certainty.”
Andrew McPhillips, chief economist at Yorkshire Building Society, expected a pause for breath because of the Brexit vote.
He said: “The outcome of the referendum could cause some prospective buyers to postpone entering the market until the dust has settled, prompting a short-term slowdown in activity.
“That said, we still expect lending to continue to grow in the coming years, albeit at a more reduced pace due to decreased foreign investment and uncertainty around the future economic landscape following the UK’s decision to leave the EU.”
Steve Griffiths, head of sales and distribution at Kensington, added: “At first glance, these are surprising figures from the CML which show that lending rose substantially in June even despite the uncertainty that characterised the run up to last month’s referendum.
“However, it’s important to remember that even with the UK’s decision to leave EU, the fundamentals of Britain’s mortgage market remain strong and the demand for property is still high.”
