The number of mortgage approvals by the main high street banks in June fell by 2.1% year-on-year and within this only remortgaging approvals increased and were 3.4% higher year-on-year.
Estimated gross mortgage lending for the total market in June was £23.5bn, 2.1% higher than a year earlier, UK Finance’s Household Finance Update for June has found.
The number of mortgage approvals by the main high street banks in June fell by 2.1% year-on-year and within this only remortgaging approvals increased and were 3.4% higher year-on-year.
This was offset by the 4.7% reduction in house purchase approvals and 4.3% drop in other secured borrowing.
Henry Woodcock, principal mortgage consultant at IRESS, said: “Despite a recent RICS survey recording newly agreed sales in decline for the sixteenth consecutive month, gross mortgage lending in June has increased from the previous month.
“While a base rate rise has not yet materialised, the likelihood of an increase is still encouraging remortgagers and first-time buyers to secure the best available deals.
“Lenders are offering an array of incentives, not just a competitive rate, with affordability criteria being relaxed to provide more bespoke deals to applicants. So, there is evidence that lenders are still fiercely competing to secure volume.
“With house prices slowing, the momentum should continue into July, with the market seeing an increase in first-time buyers overtaking home movers for the first time in twenty years.”
Eric Leenders, managing director, personal finance at UK Finance said: “Growth in mortgage lending continues to be driven by remortgaging, as borrowers take advantage of attractive deals ahead of an anticipated bank rate rise."
Mike Scott, chief property analyst at estate agent Yopa, said that the data provides mixed news for the economy as a whole with low unemployment, wage growth picking up and stable inflation.
He said: "However, business investment is restrained, the pound remains weak against other currencies and GDP growth is at its lowest level for five years, suggesting that unemployment may soon start to rise again. If the economy does turn down, it will inevitably feed through to the housing market.
“The detailed figures for June are not yet available, but it’s likely that the drop in the total number of mortgages reflects a large fall in the number of buy-to-let mortgages, with first-time buyer mortgages holding up better.
“The number of remortgages was up by 3.4 per cent, and some of that money may find its way back into the housing market via the Bank of Mum and Dad."
