Mortgage approvals fall to 18-month low

The number of mortgages being approved by banks and building societies dropped to 60,912 in July, the first full month since the Brexit vote shook the UK in June.

Last month’s figure is the lowest level seen since January 2015, and is down from the monthly average of 68,775 recorded over the first six months of this year, data from the central bank revealed.

House purchases have been marked by a continued downward trend since the start of the year, particularly after the government raised stamp duty on second homes back in April.

In June, mortgage approvals stood at 64,152, which was a slight drop from May’s figure of 65,994.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said July and August are always traditionally quieter times of the year for the market, and claimed the real test will come in September.

“We will then see whether people are making decisions to buy, or whether they put these on hold until there is further clarity.”

We need to stop blaming Brexit for our housing crisis Daniel Hegarty

Daniel Hegarty, chief executive of UK digital mortgage broker Habito, said approval rates have dropped because of the unstable economy.

He also said people are “terrified” of getting a mortgage due to the lack of understanding about the process.

“We need to stop blaming Brexit for our housing crisis and start looking at the archaic mortgage application process that’s preventing hard-working Britons from getting onto the property ladder.”

Research conducted by YouGov and Habito shows a lack of trust in professionals was preventing millions from securing an affordable mortgage deal, with just 4 per cent of the 4,236 people surveyed opting to take advice from a mortgage broker.

Figures from the Bank of England also found the number of approvals for remortgaging stood at 43,084, compared to the average of 41,887 over the previous six months.

Mr Harris said remortgaging is likely to go from strength to strength, which he suggested could be because mortgage deals - particularly fixed rates - are so cheap, adding this is a “good opportunity to snap one up”.

But he added: “What remains to be seen is how long lenders retain their appetite to lend at such low rates.”

katherine.denham@ft.com