Mortgage approvals down to seven-month low in April

The number of mortgage approvals being made to home buyers fell back to a seven-month low in April, Bank of England figures show.

By The Newsroom
Wednesday, 31st May 2017, 12:00 pm
Updated Sunday, 4th June 2017, 9:50 pm
Mortgages: lowest monthly figure since September 2016
Mortgages: lowest monthly figure since September 2016

Some 64,645 loans for house purchase got the go-ahead in April, marking the lowest monthly figure since September 2016.

The National Association of Estate Agents reported this week that the housing market showed signs of a slowdown in April, with buyers and sellers taking a "wait-and-see" approach ahead of the General Election on June 8.

The Bank of England's figures also show the number of re-mortgage loans being approved fell back in April, with 40,575 approvals recorded, marking the lowest monthly total for re-mortgaging since August 2016.

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Looking at non-mortgage borrowing, the bank's figures show annual growth in consumer credit - which includes borrowing using credit cards, personal loans and overdrafts - was at 10.3% in April, up from a 10.2% annual increase recorded in March but lower than a 10.5% rise in February.

Meanwhile, loans to large non-financial businesses increased by £2.1 billion in April, mainly reflecting lending to the public administration and defence sectors, the Bank said. Loans to small and medium-sized enterprises decreased by £340 million.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said it appears that corporates are "in a defensive mindset and are not gearing up to increase investment".

He continued: "The housing market also has continued to slow, with mortgage approvals for new house purchases falling to their lowest level since September.

"Further falls in approvals seem likely, given that new buyer inquiries reportedly are declining moderately and real wages are being squeezed."