The number of mortgage approvals fell in June to the lowest level in 15 months as Brexit uncertainty weighed on the market, new figures show.
According to the British Bankers’ Association, there were 40,103 mortgages approved for house purchase, down from May’s figure of 41,842.
House purchase approval numbers have bounced back a little from the low numbers seen in April following the 3% rise in stamp duty on second homes, but are still some 11% lower than in June 2015.
However, in the first half of 2016 numbers were 5.5% higher than in the same period of 2015.
Gross mortgage borrowing of £12.2 billion in the month was 4% higher than in June 2015. Borrowing in the first half of 2016 was £79.9 billion compared with £63.6 billion in the same period of 2015.
Net mortgage borrowing has dropped from 1.7 billion in May to 1.4 billion, but is 3% higher than a year ago.
Rebecca Harding, BBA chief economist, said: “This month’s High Street Banking data reflects the uncertainty that was felt ahead of the EU referendum.
“Mortgage lending and approvals also fell back in June but remain above the low levels seen in April following the introduction of the stamp duty surcharge.
“Overall, business confidence was clearly fragile in anticipation of the outcome of the vote, but these results are not a verdict on the health of the economy post-Brexit. We won’t start to see that data come through until the autumn and any trends before then should not be over-interpreted”
Jonathan Harris, director of mortgage broker Anderson Harris, said: “A month on from the decision to leave the European Union, it is too early to say for sure what impact this has had on the market.
June’s mortgage lending figures are too close to the event to be truly conclusive, although they indicate that lower mortgage lending and approvals were a result of the uncertainty surrounding the referendum.
“However, gross and net mortgage borrowing were still both higher than a year ago. Approval numbers also picked up from April, where numbers were lower following a surge in the first quarter as landlords brought forward buying decisions.
“Remortgaging is on the rise, a trend we expect to see continue over coming months. This is not so much because borrowers fear a rate rise – on the contrary it looks increasingly as though the next move in base rate will be downwards – but because fixed rates in particular are just so cheap.”
