Mortgage approvals declined to the lowest level seen this year in July as borrowers waited to see the outcome of the EU referendum before committing to buying, according to the BBA.
Banks approvals stood at 37,662 in July, down from 39,763 in June and almost 20% lower than in July 2015.
Andy Knee, chief executive of LMS, said: “In the month since the UK voted to leave the European Union, the latest BBA figures suggest home buyers took stock, with the number and value of house purchase approvals down compared to the previous month and year-on-year.
“The value of loans for house purchases also fell to its lowest level since March 2015 following a buoyant first six months of 2016, but what remains to be seen is whether this will become the norm or if August activity will be bounce back following the immediate shock.
“On the other hand – despite a small fall from last month – remortgaging is up 13% by value and 6% by number of approvals year-on-year as existing homeowners capitalise on the record low mortgages available. Following the vote for Brexit, swap rates fell leading to lower mortgage rates across the board.
“At the same time, intense speculation about a decrease in the Bank of England interest base rate to 0.25% and other monetary policy interventions have also contributed to lower rates, encouraged lending and driven homeowners to take advantage of this.
“Anecdotally, there is little to suggest a lull in the demand for house purchase and remortgaging. We therefore expect activity to bounce back in the autumn months once the dust settles and some sense of normality returns.”