According to the Bank of England’s Credit Conditions Survey, demand for secured lending house purchase ‘fell significantly’ in Q3 2016, despite the fact that the availability of products remained the same.
The quarterly survey of bank and building society lenders revealed a decrease in demand of more than 40% for secured credit in Q3 compared to the previous quarter.
Within this, both demand for prime and buy to let lending fell significantly, with buy to let lending experiencing the largest fall since the Credit Conditions Survey began in Q2 2007.
The fall in demand was attributed to the EU referendum, with lenders reporting that customers deferred purchases in the weeks before and immediately after the vote.
Lenders also cited speculation on future bank rate reductions as another factor that may have led to weaker demand, with borrowers holding out to see if mortgage rates might fall further.
According to the report, lenders expect the market to rebound in Q4 2016.
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