The low numbers seen in April followed the surge in the first few months of 2016, but the numbers from June are still some 11% lower than in June 2015. However in the first half of 2016, numbers were 5.5% higher than in the same period of 2015.
Gross mortgage borrowing of £12.2bn in the month was 4% higher than in June 2015. Borrowing in the first half of 2016 was £79.9bn compared with £63.6bn in the same period of 2015. Net mortgage borrowing is 3% higher than a year ago.
Consumer credit continues to show annual growth of over 6%, possibly reflecting uncertainty and in the case of personal loans and overdrafts favourable interest rates.
Dr Rebecca Harding, BBA Chief Economist, said:
“This month’s High Street Banking data reflects the uncertainty that was felt ahead of the EU referendum. Business borrowing in June dropped for the first time in 2016, signalling that investment decisions were being delayed until after the vote.
“Mortgage lending and approvals also fell back in June but remain above the low levels seen in April following the introduction of the stamp duty surcharge.”
“Overall, business confidence was clearly fragile in anticipation of the outcome of the vote, but these results are not a verdict on the health of the economy post-Brexit. We won’t start to see that data come through until the autumn and any trends before then should not be over-interpreted”
Jonathan Harris, director of mortgage broker Anderson Harris, says:
"A month on from the decision to leave the European Union, it is too early to say for sure what impact this has had on the market. June’s mortgage lending figures are too close to the event to be truly conclusive, although they indicate that lower mortgage lending and approvals were a result of the uncertainty surrounding the Referendum. However, gross and net mortgage borrowing were still both higher than a year ago. Approval numbers also picked up from April, where numbers were lower following a surge in the first quarter as landlords brought forward buying decisions.
"Remortgaging is on the rise, a trend we expect to see continue over coming months. This is not so much because borrowers fear a rate rise - on the contrary it looks increasingly as though the next move in base rate will be downwards - but because fixed rates in particular are just so cheap."
