House purchase approvals were 19 per cent lower in July than the same month last year, according to the British Bankers Association.
The latest statistical release did note that in the first seven months of 2016 approvals were some 2 per cent higher than during the same period of 2015.
Remortgaging approvals were 6 per cent higher than in July 2015, while in the first seven months of this year they were 21 per cent higher than in the equivalent period of 2015.
Gross mortgage borrowing of £12.6bn in the month was also 6 per cent higher than in July 2015, while net mortgage borrowing was 3 per cent higher than a year ago - a figure identical to the annual increase in June.
Rebecca Harding, the BBA’s chief economist, said these are the first set of borrowing figures gathered since the EU referendum.
“The data does not currently suggest borrowing patterns have been significantly affected by the Brexit vote, but it is still early days; many borrowing decisions will also have been taken before the referendum vote.”
Ms Harding also noted that annualised house prices grew at 8.7 per cent in July, but month-on-month, the value of loans was just 1 per cent higher than it was a year ago. “This indicates that the pressures in the housing market at the moment are actually quite weak,” she added.
Brian Murphy, head of lending at Mortgage Advice Bureau, said growth in lending is mainly attributable to remortgaging activity, which certainly mirrors trends he has seen.
“Looking at house purchase approvals, whilst the BBA data shows a slight drop month on month and year on year, it’s worth remembering that July 2015 was exceptionally busy due to pent up demand following the general election,” he stated.
“Of course, it’s too early to tell if the ‘June blip’ was just that, however on the face of the BBA data this morning it would appear that it’s business as usual for borrowing and with many lenders downpricing since the interest rate cut coupled with increased flexibility in lending criteria, it’s likely that August and September will also see a healthy period for house purchases and remortgaging.”
peter.walker@ft.com
