UK Finance: Mortgage approvals up 3.2%
Mortgage approvals for home purchases were up 3.2% in August according to the latest Household Finance Update by UK Finance.
There were 85,891 mortgages approved by the main high street banks in August.
Remortgage approvals rose by 0.1% whilst approvals for other secured borrowing fell by 0.4% year-on-year.
Gross mortgage lending across the residential market in August was £24bn which is a 3.2% decline from the same month in 2018.
Personal deposits grew by 1.4% in the year to August whilst personal borrowing through loans also increased, by 4.5% year-on-year.
Gareth Lewis, commercial director of property lender MT Finance, said: ‘High-street banks are doing more mortgage lending than in the same month last year, which is encouraging, as they diversify on criteria.
“But these are only marginal increases and if growth continues at this rate, it will take a long time for true stimulation of the market to happen.
“It is probably not enough to propel this market forward or stop property values from falling in some areas.
“We need to see something more positive in terms of growth of money being lent because the property market is stagnant.
“Given that we have a month to go until we exit the EU and no-one is any wiser as to what is going to happen, it seems unlikely that the market will get stimulus it needs anytime soon.’
Mark Harris, chief executive of SPF Private Clients, added: ‘Mortgage approvals for home purchase and remortgaging were slightly higher in August compared with the same month last year, suggesting that some people are carrying on buying and selling property regardless of the prevailing Brexit uncertainty.
“Lenders are certainly keen to lend. While Sainsbury’s Bank announced this week that it was pulling out of the mortgage market, there are many more lenders who are committed to doing business and are offering exceptionally low rates to entice borrowers.”
Richard Pike, sales and marketing director at Phoebus Software, also commented: “Overall, although the full market figures were lower than 2018, August showed some resilience in mortgage lending, especially lending from high street banks.
“This perhaps shows that many borrowers are creatures of habit and prefer to stick to the high street than shop around for better deals elsewhere.
“With the ONS reporting that property transactions in August increased, up almost a third from July, it looks like completions in the coming months will show healthy activity.
“It appears that despite everything that is being thrown at us, in what has to be said are very uncertain times, the issue of moving or buying a new home is a wheel that really does keep on turning.
“As parliament gets underway again today it remains to be seen whether activities in Westminster will see people apply the brakes to any housing plans, which could affect the numbers down the line.”