UK mortgage approvals dropped in September

Banks in the UK approved the fewer mortgages in September – the lowest number since May – and net credit lending card also dropped – to the lowest level since September 2014.

According to the British Bankers’ Association, mortgage approvals in September dropped down to 44,489 from 46,567 in August. Remortgaging approvals also fell in September, down to 24,859 from 25,416 in the previous month.

However, mortgage approvals were still 14 percent higher than in September last year and remortgage approvals were 40 percent higher.

“Borrowing figures in the mortgage market remain strong as customers take advantage of record low interest rates. In particular, remortgaging remains high as savvy customers secure attractive deals ahead of a possible rate rise,” BBA chief economist Richard Woolhouse said.

BBA data also revealed that net credit card lending and lending for personal loans in September also dropped from August.

Howard Archer, chief UK and European economist at IHS Global Insight, said that the drop in new mortgages suggests that it is less likely for there to be near-term rises in interest rates.

Archer said: “It may be that mortgage approvals had been lifted in recent months by a significant number of house buyers looking to move quickly to try and lock in a low mortgage interest rate before they start rising. It is also possible that lower mortgage approvals in September is a sign that housing market activity is being constrained by a shortage of properties on the market.”

Property prices in the UK have increased strongly in recent months after slowing down towards the end of 2014.

It should be noted that BBA data does not include lending by mutually owned building societies, which accounts for nearly a third of mortgages.