"Mortgage borrowing is growing at a slower pace than it has for the last few months reflecting both the slowdown in housing market growth after the April spike and broader trends in the sector"
In the first eight months of 2016 approvals remain 2% lower than in the same period of 2015.
Remortgaging approvals were 6% lower than in August 2015 but in the first eight months of 2016 were 16% higher than in the equivalent period of 2015.
Additionally, gross mortgage borrowing of £12.4bn in the month was 1% higher than in August 2015 and net mortgage borrowing is just under 3% higher than a year ago.
Dr Rebecca Harding, Chief Economist at the BBA, said: “The High Street Banking statistics published today point to a softer housing market, strong consumer credit and slightly weaker business borrowing in August. The data was collected before the Bank of England reduced interest rates to 0.25% and so give an indication of some of the underlying pressures that the MPC was responding to when it made this decision.
“Mortgage borrowing is growing at a slower pace than it has for the last few months reflecting both the slowdown in housing market growth after the April spike and broader trends in the sector."
Brian Murphy, Head of Lending at Mortgage Advice Bureau, added: “The data released from the BBA this morning suggests a generally steady market picture; gross mortgage borrowing is 1% higher than August 2015, with net mortgage borrowing just under 3% higher than a year ago. Given that August 2015 was an exceptionally busy period, due to pent up market demand following the General Election, today’s figures would suggest that the market this year is in line with normal seasonal activity. This is further borne out when we look at the number of loans approved for purchase transactions, which are actually only 1.7% lower than August 2015.
"It's also worth noting that the data released today was collected prior to the decision to cut interest rates in August, therefore the knock on effect of lenders repricing downwards and launching new, more competitively priced products which we’ve seen in the last few weeks, leading to attractive options for those who are perhaps considering buying or re-mortgaging aren’t evident in the figures reported here. Consequently, we’ll need to wait until later in October to see how a combination of the market traditionally entering its busiest time of the year - e.g. September - coupled with the anecdotal evidence we’ve seen over the last month or so of increased remortgaging activity, will play out in the BBA’s next set of figures.”
