Figures from UK Finance, out today (July 24), showed that £21.9bn of lending across the residential mortgage market took place in June — 4 per cent less than in the same month last year.
High-street banks performed better than the rest of the market, according to the results, as gross mortgage lending from the big lenders only fell 1.1 per cent.
Mortgage approvals for house purchases increased by 2.9 per cent year-on-year as 48,539 consumers were approved in June.
This marked a slight drop from the 49,683 approvals in May but figures were still above average for the year.
Mortgage approvals — where a consumer is told they are eligible for a mortgage but is yet to actually borrow the money — are typically an indicator of how the future mortgage market will fare as these consumers are likely to go on to borrow the funds in the upcoming months.
Approvals for remortgages dropped slightly, by 1.4 per cent, to 29,415. Consumers remortgaging have bolstered the market in recent years and the number of remortgages is predicted to reach its peak later this year.
Steve Seal, director of sales and marketing at Bluestone Mortgages, said today’s figures didn’t show any “major jump” but that government schemes and attractive remortgage deals were continuing to appeal to borrowers.
Gareth Lewis, commercial director of property lender MT Finance, said the high street banks’ uplift in home purchase approvals was positive but could be down to the more attractive deals lenders were pushing.
He added: “Deals are being done. A colleague recently sold his house in the north of England in two days and this wasn’t because it was priced too cheaply.
“There are people who are willing to get on and buy when an opportunity presents itself.”
Mr Lewis also thought the new prime minister could look at tax and stamp duty to help the property market, noting there were “measures afoot” to help stimulate property sales.
Boris Johnson was announced as leader of the Conservative Party yesterday (July 23) and there have been reports that he would be open to reforming stamp duty.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Encouragingly, the number of mortgages for home purchase rose in June compared with the same month last year, despite all the continued uncertainty over Brexit.
“Hopefully, the installation of a new prime minister at number 10 will affect positive change for the wider economy and housing market, although it is still very early days.”
Mr Harris added that swap rates continued to fall, with a number of lenders, including Nationwide, NatWest and Accord, cutting some mortgage rates in the past week.
He thought this downward pressure on pricing was likely to continue as lenders competed for business.
imogen.tew@ft.com
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