House purchase approvals slipped 5 per cent in August, as the mortgage market slowed down for summer.
The latest Mortgage Monitor from e.surv, the UK’s largest chartered surveyor, shows there were 63,485 house purchase approvals in August, 4.6 per cent lower than 66,569 approvals in July.
It was the second consecutive month in which house purchase approvals declined as the holiday season temporarily slowed the lending recovery. Since the start of June, monthly house purchase approvals have fallen 5.4 per cent.
However, a recovery in monthly approvals in June suggests that the recent fall is down to the holiday season, rather than an impact of new regulation.
The Mortgage Market Review (MMR) was introduced on 26 April, prompting concerns about its effect on the market. But after a slight fall in lending in its pilot month, house purchase approvals increased 8.4 per cent between May and June.
On an annual basis, house purchase approvals increased by 0.3 per cent annually, from 63,293 in August 2013.
Richard Sexton, director of e.surv chartered surveyors, explains: “The summer holiday season has temporarily slowed the mortgage market, as home-movers hang up their property search in exchange for buckets and spades.
“But this is a seasonal stagnation rather than a sign of a more permanent decline. The new MMR regulations have been fully absorbed into the mortgage application process, the backlog of applications they temporarily caused has all been cleared away, and now the mortgage market is in full health moving forwards.
“As the seasons change and we move into autumn, we are already anticipating that mortgage approvals will bounce back upwards.
“Lenders are signalling a desire to pump up lending volume towards the tail end of the year, and there is still a whole host of buyers desperate to get onto the housing ladder, particularly at the bottom of the market.”
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