Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Strategy. Read the original article for full details.

BoE Survey: Q2 Mortgage Demand Rises, Drop Expected in Q3

Residential purchase and remortgage demand increased in the second quarter of 2024, according to a Bank of England survey of mortgage lenders. However, lenders anticipate a decline in demand for the third quarter.

The Bank of England’s Credit Conditions Survey reported a net percentage balance score of 14.9% for overall residential purchase and remortgage demand in Q2. Lenders expect this to fall to -23.2% in Q3. Prime lending demand was 23.8% in Q2, with expectations of -23.2% in Q3. Remortgaging demand reached 45.5% in Q2, but is predicted to drop to -20.5% in the next quarter.

Buy-to-let mortgage demand showed a net balance of -1.3% in Q2, with lenders forecasting a further decline to -31.7% in Q3.

The survey also found that the availability of mortgages for borrowers with low loan to value (LTV) ratios at 75% or less decreased in Q2, but is expected to improve in Q3. The availability of mortgages for high LTV borrowers was stable in Q2 and is expected to remain unchanged in Q3.

Lenders reported that default rates on secured loans to households were unchanged in Q2 and are expected to remain unchanged in Q3.

These findings may be relevant for UK letting agents and inventory clerks monitoring trends in buy-to-let mortgage demand and overall market activity.