Gross mortgage lending dropped to £21.9bn in June, down by 4 per cent on the same month last year, according to the latest figures from UK Finance.
Approvals for house purchase were 2.9 per cent higher than June 2018 at 48,539, but remortgages were 1.4 per cent lower over the same comparison period at 29,415.
Today’s data follows figures from HM Revenue & Customs yesterday showing a 16.5 per cent slump in property sales last month.
North London estate agent and former Royal Institution of Chartered Surveyors residential chairman Jeremy Leaf says the contrasting trends highlight the danger of placing too much emphasis on one month’s results.
He says: “What is clear is that the market remains relatively resilient with no signs yet of corrections one way or the other.”
Responsible Lending development director Tim Waterlow says the healthy jump in mortgage approvals for home purchase shows there is “light at the end of the tunnel” following the “staggering drop” in transactions reported yesterday by HMRC.
He says: “Plenty of people in business will be crossing their fingers for a recovery in sales volumes because that is what is badly needed if, long term, upstream industries including lenders, house builders, surveyors and agents are not to suffer.
“Low sales volumes are also toxic for the property market — transactions are the oil that keeps it moving.”
Others expressed hope that political change could help reinvigorate the market.
MT Finance commercial director Gareth Lewis says: “Now we have one part of the political frustration out of the way and know who is the new Prime Minister, we may find that there are benefits when it comes to tax and stamp duty.
“We don’t know how long it will take Boris Johnson to get round to looking at that – let’s face it, there are plenty of other matters to deal with first – but there may be measures afoot to stimulate the property market at some point.
SPF Private Clients chief executive Mark Harris says: “Hopefully, the installation of a new Prime Minister at Number 10 will effect a positive change for the wider economy and housing market, although it is still very early days.
“Swap rates continue to fall, with a number of lenders, including Nationwide, NatWest and Accord cutting some mortgage rates in the past week.
“This downward pressure on pricing is likely to continue as lenders compete for business.”