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Bank house purchase approvals drop 10% YoY in October

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  • 24/11/2016
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Bank house purchase approvals drop 10% YoY in October
Banks approved 10% fewer mortgages for house purchasing in October compared to the previous year, while total gross lending dipped 4%, statistics from the British Bankers’ Association revealed.

In October, 40,851 mortgages were approved for house purchases, compared to 38,690 in September and 45,352 during the same period in 2015.

Total gross lending by banks last month reached £12.5bn. Broken down into transaction type, growth in remortgage activity outperformed purchasing, which fell YoY.

Andy Knee, chief executive of conveyancing service provider LMS, said: “The EU referendum and resulting record-low rates are driving families to capitalise and reduce their monthly mortgage bills.

“With a potential rate rise in 2017, something that 23% of remortgagors have told LMS they expect, it is comforting to see homeowners taking stock and striving to improve on their current mortgage deals.”

Year-on-year, the value of remortgage lending by banks in October rose by 4% to £4.5bn while house purchasing saw a decline of 6% from £8bn to £7.6bn.

Remortgage approvals remained fairly static last month, compared to the previous year, at 24,622; just 63 approvals higher than October 2015.

Knee added: “In general, the UK housing market is well positioned for the challenges that 2017 poses. The latest figures from the Department for Communities and Local Government show a spike in new-build dwelling starts and completions for England in Q3, in comparison to the previous quarter.

“The Chancellor’s announcement of a Housing Infrastructure Fund worth £2.3bn in yesterday’s Autumn Statement is a sign of the government’s intent to tackle the housing supply issue, crucial for market stability, which will make the UK property market more favourable for first-time buyers and remortgagors alike.”

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