Mortgage approvals
Marijana No Comments

Mortgage approvals slumped in September and gross lending steadied in what marked a turn of events following the strong remortgaging activity seen in the months to August.

In its latest household finance update trade body UK Finance reported gross lending in the residential market had dropped to £21.5bn in September, 1.2 per cent lower than the £21.8bn seen in the same month the year before, with £13.1bn being arranged by high street banks.

The number of mortgage approvals by the main banks was also down 9.1 per cent on last September’s figures, with house purchase approvals down 10.1 per cent from 41,529 to 37,352.

In the month before, August, falling house purchase approvals had been offset by strong remortgaging activity, but approvals in the remortgage market were also down in September.

Year on year they have fallen 7.4 per cent, from 29,899 last September to 27,676 now. Compared with August, the month the interest base rate was raised to 0.75 per cent, figures were down 14.7 per cent.

Eric Leenders, managing director of personal finance at UK Finance, said: “The mortgage market softened slightly in September, following strong remortgaging activity in the months preceding the recent base rate rise.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, said the softening of the mortgage market in September had come as no surprise as Brexit uncertainty was causing a number of borrowers to defer making decisions.

He said: “As soon as we have a definite deal, whatever that may look like, we expect to see a bounce as people finally make the decisions they have been deferring.”

John Goodall, chief executive at buy-to-let specialist Landbay, said the slow down in mortgage lending suggested a wider deceleration in the market.

Mr Goodall said regulatory changes, “extortionate” stamp duty, and Brexit had all contributed to a slump in the mortgage market.

He said: “Landlords have historically found themselves targets of the budget, so all eyes are on next week’s announcement.

“It is clear that now is not the time for the Chancellor to make changes or he runs the risk of further damaging the private rental sector. The only sweetener would be a reduction or removal of stamp duty, which would provide a much needed boost for the market.”

Source: FT Adviser

Leave a Reply

Your email address will not be published. Required fields are marked *