Demand for purchase mortgages has dropped "significantly" in the last quarter of 2018 and is expected to fall further in the coming months, according to the latest figures from the Bank of England.
In a lender survey for Q4 2018, published today (January 18), the Bank found demand for secured lending for house purchases had fallen to levels not seen since the beginning of last year and the outlook remained low for the first quarter of 2019.
However, the Bank reported demand for remortgaging had increased slightly in the final quarter of last year, but this is expected to decrease again in the first months of 2019.
The Bank also predicted default rates on secured loans to households would decrease in the first quarter of this year, with lenders reporting levels had remained unchanged in Q4 2018.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: "Ongoing uncertainty around Brexit is causing would-be borrowers to sit on their hands and delay making decisions as momentous as buying or selling a property.
"Until more clarity is reached, this situation is unlikely to change. However, lenders remain keen to lend and continue to reduce rates on the back of falling swaps so for those who are ready to take out a new mortgage, or indeed remortgage, there are some attractive options available."
Mr Harris added: "Remortgaging was the big success story of last year and will continue to feature strongly, although the Bank feels that perhaps the bulk of it has been done already."
Mr Harris advised borrowers should be vigilant and start looking around up to six months before their deal comes to an end to see what else is out there and potentially secure a rate to take up at some point in the future.
He said: "This will protect them if there are any rate hikes in the meantime but if when they come to remortgage there is a better rate available, they are not committed and can go elsewhere.
"Arrears and repossessions remain low mainly because of cheap mortgage rates. This situation doesn't look likely to change anytime soon, as there is too much uncertainty surrounding Brexit."
rachel.addison@ft.com
