Bank of England  

Mortgage approvals fall for third month in a row

Mortgage approvals fall for third month in a row

The number of mortgage approvals dropped during August, according to Bank of England figures, the third consecutive month of falls. 

Only 60,058 loans were approved for home purchase compared with an average of 66,734 over the previous six months.

The number of approvals for remortgaging was also slightly down to 40,225 from an average of 41,878 over the previous six months.

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Jeremy Duncombe, director of Legal & General Mortgage Club, said: “These mortgage approval figures are the first we’ve seen since the Bank of England made its historic decision to cut the Base Rate to 0.25 per cent.

“The market often experiences a lull in August as fewer people look to move home or remortgage over the summer months, so these numbers are no real surprise.

“Unsurprisingly, a significant amount of the activity last month was down to remortgagers.

“The low interest rate environment we are currently witnessing is the perfect time for borrowers to take stock of their existing mortgage deals, and speak to an adviser to ensure they are on the most competitive product available to them.”

Mortgage approvals have been falling since earlier in the year when they were at 121,765 in May.

They have since fallen through June and July, reaching 112,392 in August.

Daniel Hegarty chief executive of digital mortgage broker Habito, said: “It feels like groundhog day as mortgage approval rates are sinking again. While it’s not all bad news as lending is increasing in other areas, for first time buyers, and those looking to remortgage there is still a fear at work in the market.

“Two-thirds of first time buyers living in London are terrified of getting a mortgage and there’s a widespread lack of understanding of the mortgage process.”