"The market has not collapsed but on the ground we are seeing that the outcome and its aftermath is certainly making buyers and those considering remortgaging think twice before making decisions."
However net mortgage borrowing remains 2.6% higher than a year ago.
Remortgaging approvals were similar to those in September 2015 but in the first nine months of 2016 were 15% higher than in the equivalent period of 2015.
Jeremy Leaf, estate agent and former RICS residential chairman, commented: "This year is fast becoming one of two halves as we are seeing a succession of figures demonstrating growing uncertainty since the referendum vote in June. The market has not collapsed but on the ground we are seeing that the outcome and its aftermath is certainly making buyers and those considering remortgaging think twice before making decisions."
Mark Harris, chief executive of mortgage broker SPF Private Clients, added: "The drop in purchase activity year-on-year is no real surprise. Confidence is lower, there is still uncertainty about what the future holds and when people are uncertain they will defer decisions. Buying a house is a big transaction in anyone’s eyes and people are delaying that decision until they are happy that they are making the right one.
"The remortgage market is fairly robust but what isn’t reported in those numbers is product transfers. It has been suggested that this market is worth as much as £100 billion a year. Whereas there wasn’t really a product transfer market ten years ago, lenders are now paying more attention to their traditional clients and encouraging them to switch products but maybe not provider. Those numbers fall out of captured data and are not reflected in the BBA figures.
Brian Murphy, Head of Lending at Mortgage Advice Bureau, said: "Whilst overall lending is down very slightly on the same period last year, with just a 2% drop for the same period, the lending mix is changing. Mortgage approvals on house purchases are down by 15% on September 2015, and 3% on January to September 2015, which isn’t entirely surprising given that, in particular July, August and September last year were busy due to pent up market demand following the General Election. However, remortgage approvals are up on January to September 2015 figures by 15%, with remortgages in September 2016 up on the previous month.
"This changing split of lending potentially reflects homeowners now taking advantage of the raft of rock bottom rates available and remortgaging to potentially reduce their monthly mortgage payment, and perhaps also to re-finance their properties in order to withdraw some equity, where their home has risen in value over the last few years. We’ve certainly seen in our business that remortgage business is strong at the moment, with over 85% of our customers choosing to fix their remortgage rate. That said, we’ve also seen home mover enquiries rise in September on the previous month, which is encouraging as this potentially indicates that, after the summer lull, we may see a busier Autumn through to the end of the year.”
