Mortgage sales dropped by £1.8bn in July – down 10.8 per cent on the previous month.
Residential sales dropped by 12.8 per cent to £12.2bn, while buy-to-let dipped by 0.2 per cent to £2.6bn, according to Equifax Touchstone.
All regions across the UK witnessed a significant fall in sales, with Scotland seeing the biggest slump of 19.8 per cent, followed closely by Northern Ireland (-18.5 per cent), and the South East (-15.4 per cent).
But the year-on-year data was more positive, with overall UK sales up by 10.8 per cent to £14.8bn.
John Driscoll, director at Equifax Touchstone, said: “These figures show how volatile the mortgage market can be. Sales have tumbled in July, with every region suffering substantial declines as buyers are put off by continuing political and economic uncertainty, coupled with the worrying gap between inflation and wage growth.
“These circumstances may be further compounded by the potential for an interest rate hike as early as September, driven by continued pressure on the pound.
“On a more optimistic note, mortgage sales are up over 10 per cent year-on-year and a dip in sales for July is not uncommon; however, as the summer period comes to a close, the long-term outlook for the market still remains very unclear.”
Matthew Harris, director at Edinburgh-based Harris Financial Advice, commented: “I would say we have seen a decrease in our mortgage business, which is due to a few factors such as uncertainty over Brexit and the impact filtering through to the market of higher stamp duty rates in Scotland putting a lot of people off moving, and the continued impact of the buy-to-let tax changes.”
He added that while seasonal factors were also at play, he expected the market had undergone a semi-permanent shift and a major rebound was unlikely.
“For brokers, the benefit is a continued focus by banks on affordability, which is understandable. Things are not getting any simpler or faster, so the demand for people wanting to get a mortgage through an intermediary will be strong,” Mr Harris said.
simon.allin@ft.com
