Potential Brexit drives mortgage enquiries surge
The observation from the mortgage division of deVere Group, one of the worldâ€™s largest independent financial advisory organisation, comes as both sides of the debate on whether Britain should leave the EU up the ante in a bid to win UK voters hearts and minds ahead of the In/Out referendum in June.
Mike Coady, Managing Director of deVere Mortgages, comments: “The UK’s EU referendum is getting almost wall-to-wall media coverage. The issue is dominating news agendas and it is likely to increasingly do so as we move towards the vote on 23 June. The campaigning has noticeably ratcheted up a gear over the last two weeks. This is especially so since the announcement of London Mayor Boris Johnson, who has a long-standing ambition to be Prime Minister, to back the Vote Leave lobby.
Despite pro-Brexit groups now accusing David Cameron’s In Campaign of scaremongering by using ‘Project Fear’ ahead of the EU referendum, the messaging of the Vote In campaigners appears to be making a real impact outside Westminster.”
He continues: “Since the campaigning really got underway in a big way two weeks ago, we have noticed a significant increase in the number of people enquiring about mortgage applications. There has been a 30 per cent week-on-week jump in the number of enquiries.
We attribute this uptick largely to the fact that the In Campaign has been keen to point out, and effective in doing so, that mortgages could become more expensive if Britain leaves the European Union following June’s referendum.”
Mr Coady goes on to say: “If the UK votes to leave the EU, Britain’s very large trade deficit may cause a run on sterling and, as such, require the Bank of England to introduce higher interest rates to stem it. Of course, this would have the consequence that mortgages will become more expensive as lending rates rise.
Clearly, no-one can predict the outcome of the referendum, but it seems that the possibility of the fallout of Brexit is fuelling a surge in mortgage enquiries. People are rushing to apply for and lock-in a mortgage now as a precaution in case interest rates go up and mortgages become more costly. I believe we can expect this surge in mortgage enquiries to intensify as we approach the vote.”