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Mortgage approvals stall in September

Mortgage approvals slumped in September and gross lending steadied in what marked a turn of events following the strong remortgaging activity seen in the months to August.

In its latest household finance update trade body UK Finance reported gross lending in the residential market had dropped to £21.5bn in September, 1.2 per cent lower than the £21.8bn seen in the same month the year before, with £13.1bn being arranged by high street banks.

The number of mortgage approvals by the main banks was also down 9.1 per cent on last September’s figures, with house purchase approvals down 10.1 per cent from 41,529 to 37,352.

In the month before, August, falling house purchase approvals had been offset by strong remortgaging activity, but approvals in the remortgage market were also down in September.

Year on year they have fallen 7.4 per cent, from 29,899 last September to 27,676 now. Compared with August, the month the interest base rate was raised to 0.75 per cent, figures were down 14.7 per cent.

Eric Leenders, managing director of personal finance at UK Finance, said: “The mortgage market softened slightly in September, following strong remortgaging activity in the months preceding the recent base rate rise.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, said the softening of the mortgage market in September had come as no surprise as Brexit uncertainty was causing a number of borrowers to defer making decisions.

He said: “As soon as we have a definite deal, whatever that may look like, we expect to see a bounce as people finally make the decisions they have been deferring.”

John Goodall, chief executive at buy-to-let specialist Landbay, said the slow down in mortgage lending suggested a wider deceleration in the market.

Mr Goodall said regulatory changes, “extortionate” stamp duty, and Brexit had all contributed to a slump in the mortgage market.

He said: “Landlords have historically found themselves targets of the budget, so all eyes are on next week’s announcement.

“It is clear that now is not the time for the Chancellor to make changes or he runs the risk of further damaging the private rental sector. The only sweetener would be a reduction or removal of stamp duty, which would provide a much needed boost for the market.”

Source: FT Adviser

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House purchase approvals slide from five-month high

The value of mortgage lending rose in July but fewer home purchase loans were approved, data suggests. It comes after mortgage approvals for house purchase hit a five-month high in June.

Lending data from banking trade body UK Finance shows that the number of mortgage approvals for house purchase fell 0.6% annually to 43,976 during the month, although the number of remortgages rose 2.8% to 28,294.

Actual mortgage lending values were up 7.6% annually to £24.6 bn.

Commenting on the figures, Paul Smith, chief executive of haart estate agents, said branch activity is being driven by first-time buyers and called for more support for landlords.

He said: “Conditions are still ripe for further growth in the lending market this year.

“The UK is currently experiencing the highest level of employment in decades, mortgages remain readily available, and rates are still historically low, despite the recent base rate rise.

“On the ground, activity is looking positive – our branches have seen a 10% increase in transactions on the year. This surge of activity is largely being driven by first-time buyers who are continuing to take advantage of their Stamp Duty cut.

“However, landlords are still feeling the pinch with 12% fewer landlords buying property than the same time last year.

“The buy-to-let sector is a fundamental part of the UK property market, and with fewer landlords, we are seeing rents rise. The Government must stop penalising those who are willing to invest in the rental market and stop its needless crackdown on the sector.”

Source: Property Industry Eye