October 24, 2019 9:21:43 AM
The number mortgage approvals made to home buyers dipped to a six-month low in September, figures from a trade association show.
Some 42,310 loans were approved for house purchase – the lowest monthly total since March, according to data from UK Finance.
The number of re-mortgage loan approvals edged up, to 32,649, from 32,225 in August.
UK Finance said overdraft borrowing was 5.2% higher in September than in the same month a year earlier, while the longer-term trend has seen overdraft borrowing decline.
Meanwhile, the amount of cash put into personal deposits increased by 1.7% in the year to September.
Three-quarters of deposits were held in accounts which people could access instantly, in line with trends seen a year earlier.
Howard Archer, chief economic adviser at EY ITEM Club, said that mortgage approvals for house purchase at 42,310 in September were still modestly above the monthly average of 41,790 seen so far this year.
He said: “However, the fact that mortgage approvals eased back for a second month running in September to be at a six-month low suggests that housing market activity remains constrained amid major uncertainties.”
Dr Archer said housing market activity could be given a boost if the Government decided to cut stamp duty significantly in the Budget on November 6.
He continued: “However, the economy still looks set for a challenging 2020.”
Samuel Tombs, chief UK economist at Pantheon Macroeconomics said of the mortgage approval figures: “Political uncertainty certainly isn’t helping; some buyers also might be delaying purchases in response to speculation that stamp duty might be cut by Chancellor (Sajid) Javid in his first Budget next month.
“Nonetheless, low unemployment and falling mortgage rates are helping to offset the hit to demand from political uncertainty.
“Indeed, the average quoted rate for a five-year, 75% LTV (loan-to-value) loan fell to 1.80% in September, from 1.92% in August.”
Gareth Lewis, commercial director of property lender MT Finance, said five-year fixed-rate mortgage deals currently start from “an incredible 1.45%”.
He continued: “The biggest issue remains the lack of stock.
“Once Brexit is resolved, we hope to see more sellers biting the bullet and putting their properties up for sale, which should resolve this situation.”