Home loans slump as Brexit jitters darken the housing picture

Demand for mortgage loans has slumped amid Brexit uncertainty, the Bank of England’s latest snapshot of credit conditions warned on Thursday.

Lenders reported that demand for home loans “decreased significantly” in the three months to December, showing the steepest drop since the immediate aftermath of the referendum vote in 2016.

More falls in demand are expected in the quarter to February, it added, despite lenders slicing profit margins to entice buyers.

The gloomy findings tallied with a Royal Institute of Chartered Surveyors warning that the housing market faced its bleakest outlook for 20 years over the next three months.

Despite modest profit upgrades from the sector in recent days, shares in major players like Taylor Wimpey, Persimmon and London-focused Berkeley dropped more than 1%. The dire survey put the brakes on a minor recovery in housing stocks this year after a 27% slump in 2018.

Peel Hunt’s Clyde Lewis said: “It’s not surprising that people are deferring decisions.”