On a yearly basis, mortgage lending fell by 1.2% in September 2018 to £21.5bn from £21.8bn in the same month last year, according to the latest report released by UK Finance.
In August 2018, this figure stood at £24.4bn, showing a fall of nearly 12% on a monthly basis.
The number of mortgages approved by the main high street banks dropped by 9.1% compared to September 2017.
Approvals for house purchase decreased by 10.1%, remortgage approvals were down 7.4%, whilst approvals for other secured borrowing were 9.8% lower.
Eric Leenders, managing director of personal finance of UK Finance, said that mortgage market softened slightly in September, following strong remortgaging activity in the months preceding the recent base rate rise.
He added: “Consumers are increasingly choosing to keep cash close to hand, with deposits held in instant access accounts showing steady growth.”
Softened mortgage market puts pressure to pick up momentum
Jeff Knight, marketing director for Foundation Home Loans, said that the market may seem fairly flat, as households continue to be squeezed by inflation and perplexed by market uncertainty.
He added: “With the Budget looming and rumours stamp duty will either be banded, overhauled or increased, buy-to-let landlords will be hoping for clarity to safeguard this side of the market. For now, the remortgaging market moves steadily on as landlords enjoy more specialist offers from lenders to mitigate this uncertainty, and this should maintain momentum for the months ahead.”
Mark Harris, chief executive of mortgage broker at SPF Private Clients, said that this softening of the mortgage market in September comes as no great surprise as Brexit uncertainty is causing a number of borrowers to defer making decisions.
He added: “As soon as we have a definite deal, whatever that may look like, we expect to see a bounce as people finally make the decisions they have been putting off.”