Mortgage approvals rebound in August: UK Finance

House purchase approvals by the High Street banks reached 41,807 in August, stronger than the monthly average of 41,133 over the last six months and 11% higher than the same time last year when the market was subdued following the referendum result.

Related topics:  Mortgages
Rozi Jones
26th September 2017
House sale sold
"There is also some rebalancing across regions, as activity picks up in the north of England, Wales and Scotland, away from London, the south east and east Anglia."

The High Street banking data and mortgage market commentary from UK Finance shows that mortgage borrowing rose 2.6% on the month.

UK Finance estimates that overall gross mortgage lending in August was £24.2 billion, of which £15.1 billion was lent by High Street Banks. Accounting for seasonal factors, this figure is in the same ball park as monthly lending over the course of 2017.

UK Finance’s Senior Economist Mohammad Jamei, said: “Housing market activity is in Goldilocks territory, growing only modestly since the start of the year, though the mix of activity has shifted towards first-time buyers, away from buy-to-let and cash. There is also some rebalancing across regions, as activity picks up in the north of England, Wales and Scotland, away from London, the south east and east Anglia.

“Despite resilience in consumer spending, annual growth in consumer credit has been slowing over the last few months. Across the UK some households have opted to save a little less, whilst others have not increased their borrowing. Meanwhile there has been growth in business deposits as non-financial companies hold cashflow and reserves amidst broader uncertainty in their trading conditions.”

Jeremy Leaf, north London estate agent and former RICS residential chairman, commented: "Although these numbers are a little historic, they do confirm that buyers and sellers are getting on with their business and negotiating hard to make sales happen. Looking forward, we have noticed more activity since people have returned from their summer holidays but many vendors still need to recognise the reality of the new market conditions."

Mark Harris, chief executive of mortgage broker SPF Private Clients, added: "First-time buyers continue to drive the housing market, which is encouraging as they are important to its overall health. Investors continue to be cautious, with buy-to-let more muted than in the past, but this is leading to more balance between residential and investment transactions.

"Lenders remain keen to lend and there are some very competitive rates available. However, with increasing talk from the Bank of England regarding the possibility of a rate rise, these very cheap deals may not be around for ever."

More like this
Latest from Property Reporter
Latest from Protection Reporter
CLOSE
Subscribe
to our newsletter

Join a community of over 30,000 intermediaries and keep up-to-date with industry news and upcoming events via our newsletter.