Mortgage approvals dipped for the first time in six months during February, suggesting that housing market activity is starting to be affected by the squeeze on consumers.
According to new figures from the Bank of England, the total number of mortgages approved fell by almost 3,000 in February to 125,622.
The Bank’s Money and Credit report showed that mortgage approvals for house purchases fell 1.2% to 68,315 in February, but still up on the six-month average of 66,089.
A total of 43,822 loans for remortgage were approved, down from 45,859 the previous month.
This took the total value of remortgaging for the month down by £300,000 to £7.7 billion.
Howard Archer, chief economist at IHS Global Insight, said the figures suggested housing market activity was starting to be affected by the “increasing squeeze on consumers and their concerns over the outlook”.
He said: “The February slowdown in mortgage approvals reported by the Bank of England fuels our suspicion that housing market activity and prices will come under increasing pressure over the coming months from weakening fundamentals.”
Jeremy Duncombe, director of Legal & General Mortgage Club, said the dip in lending was a result of market fluctuations rather than the impact of Brexit.
“Monthly fluctuations are typical of our housing market and today’s slight dip in mortgage approvals is testament to this. It is important that we aren’t distracted by these nuances and instead focus on the opportunity borrowers have to significantly save money on their mortgage deals in our current low interest rate environment,” he said.
“Overall, the market remains very much business as usual and this confidence is likely to continue even after Article 50 is triggered.”
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