The mortgage market cooled in August with approvals plunging 9.4 per cent year on-year.
British Bankers’ Association figures show the total number of approvals in August reached 64,190, down from the previous August’s 70,859. In terms of value, approvals in August totalled £9.6bn, falling 4 per cent from £10bn the previous August.
Despite the fall in the total number of mortgage approvals, the value of gross lending rose 10.6 per cent from £10.3bn in August 2013 to £11.4bn last month.
Purchase approvals saw a small increase in August, totalling 40,476 , a rise of 2 per cent from 39,740 12 months earlier. The value of purchase approvals increased 5 per cent from £6.2bn in August 2013 to £6.5bn last month.
The remortgage slump continued in August as approvals fell 20 per cent from 21,981 to 17,678 between August 2013 and last month. The value of remortgage approvals in August was £2.8bn, down 15 per cent from £3.3bn in the same period.
Loans for other purposes, including further advances, saw the biggest fall, with approvals dropping 34 per cent from 9,138 in August last year to 6,036 in August 2014, with the value of these approvals falling 18 per cent from £394m to £325m.
London & Country associate director of communications David Hollingworth says: “It is good to see that purchase approvals are up year-on-year, but the overall decline in approvals could be the final effects of the Mortgage Market Review, coupled with the summer lull. I think we are starting to get over the MMR hump now and that should be reflected in future figures.
”There is certainly room for improvement in the remortgage sector and lenders are starting to offer some good rates for remortgages so that should start to happen soon.”
The figures are taken from the six largest UK retail banking groups, including Barclays, HSBC, Lloyds Banking Group, Royal Bank of Scotland, Santander and Virgin Money. They account for some two-thirds of UK mortgage lending.