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Mortgage approvals fall for sixth month in a row

Mortgage approvals for house purchase fell in October to 47,185, marking the sixth consecutive monthly fall, shows the latest figures from the Bank of England.

October saw 47,185 mortgage approvals for house purchase, down from September’s 47,369.

The October figure is lower than the six-moth average of 48,503.

Overall, a total of 99,930 mortgages were approved for all purposes in October.

Net mortgage lending however rose by £1.0bn in October, compared to a £0.2bn increase in September and was above the previous six-month average of £0.6bn.

Total lending to individuals increased by £1.3bn, 0.1% in October.

There were 29,275 approvals for remortgaging, little changed on September’s 29,019 but higher than the previous six-month average of 27,248.

Paul Diggle, property economist at Capital Economics, says: “In value terms, £11.2bn of mortgages were approved in October, a rise of 1.2% but a fall of 3.7%.

“We do not take much comfort from this slight top-level improvement, given that mortgage approvals for house purchase lost further ground, falling by 0.4% to 47,185 in October.

“But overall, the take-home message is that the troubles in the mortgage market are still with us.”

Brian Murphy, head of lending at independent mortgage broker, Mortgage Advice Bureau, says: “House purchases are very flat at present, probably the flattest they have been since the darkest days of the recession.

“Until people are more confident about their personal circumstances and finances, there is unlikely to be much change on this front and the property market will continue to stagnate.

“Product numbers now are the highest since the economic downturn began but the vast majority of loans are at 75% LTV or below. There is far less choice between 75% LTV and 90% LTV, which is holding the market back.

“The slight uptick in remortgages reflects how borrowers are increasingly beginning to move off SVRs, which can be above 4%, onto longer term fixes that are often far more competitive.”

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