Mortgage activity has slumped compared to 2016 despite the sluggish nature of last year’s market after the 3% stamp duty surcharge came into force.
BBA figures show that in May there were 40,347 approvals for house purchase and 24,248 for remortgage, 3.3% and 10% lower than the corresponding period last year.
Though approvals data was subdued gross mortgage borrowing was in line with recent months at £13.3bn, which was 9% higher than the year before.
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “At first glance you might think the BBA figures are quite encouraging but when you consider what was happening 12 months ago, one realises that they are not quite as impressive as they might seem.
“Last May the housing market was still reeling from the imposition of the 3 per cent stamp duty surcharge on second homes so we would have expected approval numbers to have been considerably above where they were this time last year.
“Looking forward, there is no indication that we will see a bigger correction in the property market, just a continuation of what we have seen over the past few months – more cautious trading and more realism among buyers and sellers.”
The 3% stamp duty surcharge affecting buy-to-let investors and second homebuyers came into force in April 2016.