UK Mortgages, Credit Demand To Decline Pre-Brexit

British lenders say that leading up to Brexit, they expect the largest drop in demand for credit cards and mortgages than they’ve seen in many years, according to a survey by the Bank of England. As Reuters reported, the survey findings add to the already ominous signs of an upcoming economic turndown in the country.

Britain is due to exit the European Union on March 29. The details are still unclear as to whether businesses will be able to continue to trade uninterrupted, and also how cross-border supply mechanisms will be affected.

The Bank of England survey found that demand for mortgage loans over the following three months dropped -17.5 in Q4 of ‘18, from 0.2 in Q3. That’s the lowest it’s been since 2010.

For credit card lending, demand over the next three months declined to -20.7 from -7.2. Again, those are the weakest numbers since the quarterly Credit Conditions Survey started recording in 2007.

The Royal Institution of Chartered Surveyors said the expectations for British home sales over the next three months dropped to the lowest level since it started recording 20 years ago. Ever since the June 2016 Brexit referendum, Britain’s housing market has slowed down, growing at the slowest pace in five years.

In November, lobbying group Frankfurt Main Finance warned that London is going to lose €800bn in assets to Frankfurt by March, as banks start moving business to Germany ahead of Brexit.

The data came after 30 banks and financial companies confirmed they chose Frankfurt as the city for their new EU headquarters.

The lobbying group thinks the number will grow to 37 when accounting for JPMorgan, Goldman Sachs and Morgan Stanley, which plan to spread operations across several cities. That means billions of pounds in assets are leaving London for Germany.

“All in all, we expect a transfer of €750bn to €800bn in assets from London to Frankfurt, the majority of which will be transferred in the first quarter of 2019,” said Hubertus Väth, the managing director of Frankfurt Main Finance.