The number of house purchase approvals continues to be very low while those for remortgaging have fallen, according to the figures. Consumer credit rose by £0.1 billion in July and was below the previous 6 month average of £0.3 billion. Personal deposit growth was weak and consequently the annual growth rate declined by 0.8% to 4.8%.
Approvals for house purchase may be stabilising, at a very low level in July, some 65% lower than a year ago. Approvals for remortgaging in July were 21% lower than last year but were still around 50% of all approvals. Approvals for equity withdrawal & other purposes shaded upwards in July.
BBA statistics director, David Dooks, said: “The monthly numbers of approvals for house purchase, which have fallen by some two-thirds over the last year, levelled off in July. It would, however, be premature to think that the housing market will now start to recover, because overall approval activity continues to be very low. The pressures on household budgets are reflected in the relatively weak rise in individuals’ deposits and, with consumer borrowing growing only slowly it seems that consumers are acting prudently.”
Commenting on the BBA mortgage lending figures, Oliver Gilmartin, RICS senior economist said: "Mortgage activity appears to be stabilising although the paltry level of activity is not supportive of a near term pick up in house prices. The driver of house prices in the near term will be the resilience of the economy and the outlook for the labour market both of which appear to be showing cracks. Few crumbs of comfort can be taken from recent signs that mortgage activity may have finally found a floor amid a backdrop of a stalling economy and expected rises in unemployment."
