Mortgage lenders to see "inevitable" slowdown in volumes

For traditional mortgage lenders, "a slowdown in volumes looks inevitable" following the outcome of the Referendum, according to Alistair Jeffery, Executive Chairman at Bluestone Group.

Related topics:  Mortgages
Rozi Jones
5th July 2016
EU house Europe flag Brexit
"For traditional mortgage lenders, a slowdown in volumes looks inevitable as purchase decisions are delayed and buy-to-let investors take profits or de-lever."
- Bluestone Group

Jeffery cited delayed purchase decisions and buy-to-let investors de-levering, but believes that Brexit will spark an increase in product niches such as non-resident borrowers and consumer buy to let.

He added that house price growth is "likely to moderate, particularly in London and the South East, reflecting the markedly lower consumer sentiment, weaker levels of inward investment, and potentially the first signs of voluntary repatriation of EU nationals".

However Bluestone say that in the immediate aftermath of the Referendum, specialist lenders have been "hit harder by the negative sentiment than their mainstream peers, as growth and margin pricing premiums are unwound".

Yet in the medium-term, Jeffery believes the sector is likely to benefit from criteria tightening amongst the major banks and building societies which will "displace more applicants from traditional sources of finance".

Following the Bank of England's Financial Stability Report, published today, Jeffery commented: “The result of the EU referendum has heralded a period of increased volatility and uncertainty, as companies consider the potential impact of the outcome on their businesses.

"The slowdown in new issuance in the capital markets looks set to continue for several months, whilst the picture clears and issuers and investors adjust to the new world order. Credit spreads have widened somewhat, but in contrast to the financial crisis of 2008, there are no signs of any liquidity related stress or related increase in borrowing costs at this stage."

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