Bank of England rate cut helps drive mortgage sales recovery
The Bank of England interest rate cut last month helped buck the traditional summer slowdown for August mortgage sales with a 6.6% (£875m) increase on July, according to the Equifax Touchstone analysis of the intermediary marketplace. Residential and buy-to-let figures for the month totalled £14.1bn.
August 2016 saw buy-to-let figures jump 9.1% (£207m) and residential grow by 6.1% (£668m) on July. Comparatively, the market dropped by 13% in August 2015 and by 18% in August 2014.
Iain Hill, Relationship Manager, at Equifax Touchstone, said: “Volatile market behaviour in recent months has left mortgage sales sensitive to external influences, including the usual end of summer slump and the Bank of England interest rate cut. Following the fall in July mortgage figures and the usual trend of decreasing figures in August, it’s a welcome surprise to see a break in the usual slow summer period.
“The uncertain nature of the market as it tries to navigate the Brexit environment makes this an exciting time to watch where sales will go next. With September already off to a strong start, we could see further growth in the rest of 2016.”
Regional performance for the month was mixed; Northern Ireland stormed ahead with an increase in mortgage sales of 41.5%, while London showed sluggish growth of just 1.3%.
The data from Equifax Touchstone, which covers 92% of the intermediated lending market, shows that the average value of a residential mortgage in August was £187,162 (2015: £183,953) and £154,795 for buy-to-let (2015: £159,362).
Equifax Touchstone utilises intermediary and customer profiling tools to provide financial services providers with a detailed understanding of their marketplace and client base.