Mortgage approvals increase by 3.2 per cent in August

Mortgage approvals increased by 3.2 per cent in August, according to the latest data from UK Finance.

The figures, from the latest Household Finance Update, show that there were 85,891 mortgages approved by the main high street banks in August, while remortgage approvals rose by 0.1 per cent.

In total, gross mortgage lending in the residential sector was £24 billion in August, while personal deposits grew by 1.4 per cent year-on-year and personal borrowing via loans increased by 4.5 per cent.

Experts believe that the August 2019 figures show that there has been some resilience in the mortgage market, particularly from the high street banks.

Official figures from the Office for National Statistics (ONS) indicate that there was an increase in property transactions in the month of August, increasing by almost one-third.

Experts have stated that a mixture of low inflation and pay growth have contributed to consumer spending growth, which has resulted in an increase in mortgage approvals in August.

Mark Harris, Chief Executive at SPF Private Clients, said: “Mortgage approvals for home purchase and remortgaging were slightly higher in August compared with the same month last year, suggesting that some people are carrying on buying and selling property regardless of the prevailing Brexit uncertainty.

“Lenders are certainly keen to lend. While Sainsbury’s Bank announced this week that it was pulling out of the mortgage market, there are many more lenders who are committed to doing business and are offering exceptionally low rates to entice borrowers.”

Property lawyer Ben Menahem considered the reality of such “resilience” by delving into the figures with preferred mortgage broker, Joe Cohen of Private Client Finance, who shared his property finance specialist views:

 “Although mortgage approvals increased by 3.2 per cent in August I do think a large contributor to this is the remortgage market.

 “Although the lower end of the market is still buoyant the market over million pounds has come down quite a bit and the larger properties over £2 million are mainly being sought by overseas investors due to the weakened currency.”