Home loans slow as EU referendum torpor sets in to housing market

Home loans slow as EU referendum torpor sets in to housing market

Home loans activity has fallen to a 12 month low as market torpor sets in ahead of the EU referendum. 

According to a survey by online surveyor service e.surv only 65,113 house purchase approvals were made in May, following seasonal adjustments, which is down 1.7% from 66,250 the previous month. 

This marks a 12-month low in lending levels, and is the lowest monthly figure for home purchase loans since the 64,626 granted in May 2015. 

It follows monthly declines seen in April this year (down 5.8 per cent) and March (down 3.0 per cent) meaning volumes have fallen 10.5 per cent over the last three months. 

This represents a marked turnaround from the peak in lending seen at the start of the year. 

January and February both saw strong numbers of house purchase approvals granted (73,060 and 72,512 per month respectively) as buy to let landlords and second homebuyers pushed through purchases ahead of the stamp duty changes in April. 

The proportion of small-deposit lending also dropped slightly in May, to comprise 18.4 per cent of total home lending - down from 19.1 per cent the previous month. 

Meanwhile, lending to large-deposit buyers, those with a deposit of 60 per cent or more, picked up significantly and now makes up almost a third of all borrowing.

Article courtesy of Estate Agent Today | Sign up for Estate Agent Today newsletter | Get this news on YOUR site!