Banks approve lowest number of mortgages for 20 months


August 30, 2016

British banks approved the lowest number of mortgages since January 2015 in July, according to the Bank of England.

Approvals fell to 60,912 in the month following the EU referendum – a drop of 3,240.

The Banks figures also revealed a cooling in the amount of credit borrowed by consumers.

Consumer credit, including credit cards and personal loans, increased by £1.181bn in July, the slowest increase since August 2015.

It took the annual rate of growth down to 10.1% from 10.3% – the first drop in growth since December 2014.

Richard Pike, sales and marketing director of Phoebus, said: “The rise in remortgaging shows that existing homeowners seem to have been positively affected by the cut in base rate last month and the fact that mortgage rates are at an all-time low.

“The same cannot be said for home buyers. A number of potential house buyers seem to have been put off buying in July; what remains to be seen is whether this is in fact the ‘Brexit effect’ or a normal seasonal downturn that will pick up in September.

“I expect there to be a further drop off in August’s figures so we will need to wait until the Autumn to see if this is a pause for breath or the start of a more serious downturn.”

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