Housing market fears are 'wide of the mark' as mortgage lending surges after Brexit vote

Mortgage lending surged in August despite concerns about the health of the housing market. The Council of Mortgage Lenders (CML) said gross mortgage lending hit £22.5bn ($29.5bn) during the month, 7% higher than July and up 15% year-on-year.

"Widely voiced fears in recent months about the housing market have proved to be wide of the mark," said Mohammad Jamei, senior economist at the CML.

On 23 June, Britain voted to leave the European Union in a referendum, sparking economic and political uncertainty, with some commentators predicting a sharp fall in house prices as confidence drained away.

The Bank of England moved quickly to slash interest rates to new lows and inject billions more stimulus into the economy. But while Brexit concerns compounded existing issues around affordability for first-time buyers and tax hikes weakening investor demand, the housing market is generally holding firm.

"This recovery in sentiment is likely to be down to a number of different factors, including the Bank of England's monetary stimulus and its introduction of the Term Funding Scheme in August," Jamei said.

"A subsequent uptick in approvals is anticipated, albeit still at levels lower than earlier this year as affordability constraints and lack of properties on the market for sale continue to bear down on borrowers. The Bank also continues to indicate another rate cut on the cards, if medium-term prospects remain unchanged."