New data reveals a 2% year-on-year drop in gross mortgage borrowing this September, along with a 15% year-on-year drop in mortgage approvals for house purchase, while month-on-month house purchase approvals edged-up slightly.
According to the British Bankers’ Association (BBA), gross borrowing was £12bn in September, down from the £12.4bn reported in May.
The Association also reported that its members approved 38,252 mortgages for house purchase in September.
While this figure is 15% down on the same month last year, it is up on the 37,241 approvals recorded in August this year, which is the lowest level seen since January 2015.
Remortgaging approvals were found to be similar to those in September 2015, but were 15% higher in the first nine months of 2016 than in the equivalent period of 2015.
Rebecca Harding, chief economist at BBA, said:
“Mortgage approvals picked up slightly this month but the housing market continues to shows signs of underlying weakness. Both house purchase and remortgaging approvals are down on the corresponding figures for 2015.”
Doug Crawford, CEO of My Home Move, added:
“There has been a lot of doom and gloom about the housing market, but there are rays of light in today’s BBA lending figures. Looking at 2016 to date compared to the same period in 2015, approvals are down only 4% and 2015 was an unusually busy year.
“Going back one step, further mortgage approvals this year have closely tracked those of 2014, with the only exception being July – the immediate aftermath of the Brexit referendum result.
“The reality of recent years is that it is not clear what ‘normal’ looks like when trying to benchmark the performance of the housing market. Taking a broader perspective and looking at the first nine months of the previous two years reveals that the number of approvals is only slightly behind 2015 and 2014 – which were both incredibly strong years for housing sales.
“While the performance that this highlights might not be spectacular, it is steady and reassuring – especially in the context of the shock caused by the Brexit referendum result and the forecasts of many that the housing market would freeze to a standstill. Instead, we are seeing people getting on with their everyday lives including buying new homes to live in.”
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