BBA: Market settling post-MMR

The British Bankers’ Association says lenders’ application processes have settled post-MMR after revealing approvals were up 0.8 per cent year-on-year in July and 1.5 per cent up on the month before.

According to the BBA, the six major high-street banking groups approved a total of 69,489 loans in July, up from 68,906 in July 2013 and 68,440 in June. The value of approvals reached £10.5bn, up 11 per cent from £9.5bn at the same point a year earlier.

High street banks approved a total of 42,792 house purchase loans last month, up 12 per cent from 38,271 a year earlier. Purchase approvals totalled £7bn in value, up 19 per cent from £5.9bn in July 2013. Despite the annual increase in volume, purchase approvals did dip, albeit by less than 1 per cent, in July from 43,180 in June.

Remortgages in July were down on an annual basis, with 19,784 approvals representing an 8 per cent fall from 21,512 a year earlier. The value of July’s remortgage approvals reached £3.1bn, down 3 per cent from £3.2bn in July 2013. On a monthly basis, remortgages grew 4 per cent from 18,972 in June to 19,784 in July.

There were a total of 6,913 approvals for other forms of secured lending in July, down 24 per cent from July 2013’s 9,123. However, approvals for other secured lending were up 10 per cent on a monthly basis from June’s 6,288.

BBA chief economist Richard Woolhouse says: “Mortgage approval processes have now settled after the introduction of MMR, to a typical level of around 40,000 mortgage approvals a month for house purchase.”

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.