Mortgage approvals drop in September

Mortgage approvals drop in September

Data from the Bank of England showed the value of mortgage lending increased in September despite a drop in total volumes.

Households borrowed £3.9bn secured against their homes in September, up from £3.1bn in August and £3.3bn in July.

But the number of approvals was down for the month. In total 65,269 mortgages were approved for house purchases, down from 66,101 in August, while there 49,169 remortgages, down from 52,072.

The Bank's Money and Credit report for September showed the annual growth rate of mortgage approvals was unchanged at 3.2 per cent, in line with where it has stood since 2016 but modest compared with pre-crisis levels.

Steve Paterson, director at Teesside Money, said despite a recent increase in interest rates and a slight change of risk appetite among equity release providers, the current mood in the mortgage market was positive.

"I haven’t seen any major difference with the amount of approvals or with applications," Mr Paterson said. "I was expecting a possible dip with Brexit and economic uncertainty on the horizon, but business so far has been positive."

Kevin Roberts, director and the Legal and General Mortgage Club, said: "Despite the ongoing uncertainty of the Brexit negotiations, the mortgage market continues to perform strongly with more choice for customers as a growing number of products become available."

The Bank of England data followed the recent release of UK Finance’s household finance update for September, which showed a slump in mortgage approvals in September.

The report said gross lending in the residential market had dropped to £21.5bn for the month, 1.2 per cent lower than the £21.8bn seen in the same month the year before, with £13.1bn being arranged by high street banks.

Eric Leenders, managing director of personal finance at UK Finance, said: "The mortgage market softened slightly in September, following strong remortgaging activity in the months preceding the recent base rate rise."