"June’s data looks like a blip, probably caused by pre-Brexit nervousness. But it is too early to tell how the data over the next few months will reflect the result of the decision to leave the EU."
Net mortgage borrowing is 3% higher than a year ago, with the BBA saying its data does not currently suggest borrowing patterns have been significantly affected by the Brexit vote.
House purchase approval numbers are around 19% lower than in July 2015, though the data shows that in the first seven months of 2016 they are some 2% higher than in the same period of 2015.
Remortgaging approvals were 6% higher than in July 2015 and in the first seven months of 2016 were 21% higher than in the equivalent period of 2015.
Dr Rebecca Harding, BBA Chief Economist, said: “This month’s BBA High Street Banking statistics 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.”
"June’s data looks like a blip, probably caused by pre-Brexit nervousness. But it is too early to tell how the data over the next few months will reflect the result of the decision to leave the EU.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, commented: "The first set of lending figures post referendum show little signs of panic although those decisions to borrow would have been made before the outcome was known.
"July and August are always traditionally quieter times of the year for the market; the real test will come in September when people get back from holiday. Then we will see whether they are making decisions to buy or whether they put these on hold until there is further clarity.
"Remortgaging is likely to go from strength to strength. This is not so much because borrowers fear a rate rise: rather mortgage deals are so cheap, in particular fixed rates, that it seems crazy not to snap one up. What remains to be seen is how long lenders retain their appetite to lend at such low rates."
Brian Murphy, Head of Lending at Mortgage Advice Bureau, added: “The growth in lending is mainly attributable to remortgaging activity, with an increase of 19% on July 2015, which certainly mirrors trends that we are seeing across our business in terms of remortgage enquiries. 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, and therefore comparing last month’s figures to the same period in 2014, when housing market conditions were normal, there is only a very slight decrease.
"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.”
