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Mortgage approvals fall in August

Mortgage approvals fall in August

Mortgage approvals dropped by 3.3 per cent in August, according to Bank of England data.

Seasonally adjusted approvals fell from 129,339 to 125,057 during the month, reversing a 5 per cent rise in July.

But despite falls across loans for house purchase, remortgage and other advances, the overall figure remained above the previous six-month average of 123,561.

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Approvals were down from £21.1bn to £20.6bn by value.

The figures contradict UK Finance’s estimated lending figures for August, which showed a rise in lending on the back of a surge in remortgaging.

John Phillips, Just Mortgages and Spicerhaart sales operations director, said: “Although figures released by UK Finance earlier this week were estimated there does appear to be inconsistency between those and the figures released by the Bank of England this morning.   

“The picture is still one of a steady market which is encouraging given the changeable political landscape. However if the Bank of England, as has been intimated, put rates up before Christmas I am in no doubt that the market will take a dive.”

Bank of England governor Mark Carney has recently said there will be a rate rise in the "relatively near term" and said it was time for the bank to "ease its foot off the accelerator".

Jeremy Duncombe, director of Legal & General Mortgage Club, added: “Although there has been a slight dip in mortgage approvals, in the face of ongoing uncertainty around the Brexit negations, lending figures continue to be robust, highlighting the ongoing strength of the mortgage market. 

“This is clearly the result of continuing high demand for housing across the UK, but also savvy borrowers who are looking to secure a good deal on their mortgage by fixing their rates now, before a likely near-term rise in the base rate.”

simon.allin@ft.com