In London and in some surrounding areas, Bank of England contacts reported that transaction numbers were "materially lower" than a year earlier, reflecting the effects on demand of the vote to leave the EU and, in some areas, earlier changes made to stamp duty.
However housing market activity had held up much better elsewhere in the United Kingdom, especially in the market for lower‑to‑medium value homes.
The Bank says that major house builders have "remained bullish" about the prospects for demand for new homes, with little evidence that the referendum had materially affected site visits, reservations, or fall‑through rates outside parts of the South East.
Mortgage availability has also remained "highly favourable", although increased caution about lending at loan to value ratios above 95% was reported and surveyors’ had been more cautious in valuations. It found that demand for mortgages had eased a little overall, but with considerable variability by region.
The Bank of England's summary of business conditions for Q3 found that activity, including demand for financial services, slowed overall as uncertainty rose following the EU referendum, although it "remained positive". Additionally, business sentiment improved slightly in August following a marked dip in the immediate aftermath of the referendum.
Its research found that many financial services companies were waiting to see whether business growth recovered after the traditionally quiet summer months, to assess better underlying demand conditions and inform strategic decision‑making.
Some contacts — such as advisory firms — were hopeful that demand in certain areas of work would rebound, as firms started to take major business decisions in light of the EU referendum vote.
