What does the future hold for the mortgage market? | moneyfacts.co.uk

Moneyfacts.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfacts.co.uk will always be from news@moneyfacts-news.co.uk. Be Scamsmart.

MONEYFACTS ARCHIVE. This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Published: 27/06/2016

The mortgage market has been plunged into a period of intense uncertainty, and while new figures from the Council of Mortgage Lenders (CML) show that mortgage lending still saw a slight uptick in May, the market's full of speculation over where it'll go next…

Lending growth

The figures show that gross mortgage lending reached an estimated £18.2 billion in May, which marks a slight increase of 4% from April (when the figure stood at £17.6 billion) and a rise of 14% from May 2015 (£16 billion). It also makes it the highest May figure since 2008 when the lending total hit £23.7 billion, so at first glance, all looks good – it's just what comes next that isn't quite so clear.

Boost or fall?

Given the referendum result, we simply don't know what lies ahead for the mortgage market. Uncertainty reigns, and although this is expected to affect mortgage activity in the short term – "we expect this [uncertainty] to affect sentiment and reduce activity below levels that would otherwise be expected in the near term, as both buyers and sellers adopt a wait-and-see attitude until the dust begins to settle", said the CML's Mohammad Jamei – the longer-term result is less clear.

However, some commentators are predicting a boost in remortgaging activity in the wake of the decision, with current homeowners looking to capitalise on the low cost fixed rate mortgage deals currently available to get a bit of certainty (in terms of mortgage repayments, at least) in the years ahead.

Conversely, others predict that house price growth could be affected, with consumers expected to postpone major spending decisions until a more certain landscape emerges. This will lead to a reduction in demand, which could then affect house prices. But all may not be lost: as Jamei says, the fundamentals underpinning house prices "still look sound" and significant house price falls aren't expected as a result, "especially given the current supply/demand imbalance".

This will hopefully allay some fears borrowers may now be experiencing, but the general consensus is clear: we just don't know what happens next! The path of mortgage rates is equally as uncertain – some predict rate rises amid the heightened level of risk and uncertainty, while others suggest that rates could fall if base rate is cut – but the end result remains a mystery. It's a case of wait and see, but as ever, we'll keep you updated with market trends and activity levels, no matter what happens next.

What next?

Thinking of taking the plunge? Check out the top mortgage rates to get started.


Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time. Links to third parties on this page are paid for by the third party. You can find out more about the individual products by visiting their site. Moneyfacts.co.uk will receive a small payment if you use their services after you click through to their site. All information is subject to change without notice. Please check all terms before making any decisions. This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.

red house and blue house on top of stack of coins


Moneyfacts.co.uk will, like most other websites, place cookies onto your device. This includes tracking cookies.

I accept. Read our Cookie Policy