Mortgage approvals dipped in June following the UK’s decision to leave the EU but economists are predicting these may still fall further given wider economic uncertainty.
Bank of England data published today shows total mortgage approvals fell by around 2 per cent month-on-month from 122,158 to 120,215.
This was driven by the number of house purchase approvals dropping to 64,766 last month, a decrease of 3 per cent from 66,722 in May.
But remortgage approvals saw a slight uptick in activity in June, going from 42,855 in May to 43,102.
Capital Economics UK economist Paul Hollingsworth says the drop in house purchase approvals is below the expected figure of 65,650 and down on the 70,000 peak seen earlier this year.
He says: “The drop in UK mortgage approvals in June highlights that the housing market cooled further around the time of the EU referendum.
“With heightened uncertainty about the economic outlook having apparently sapped new buyer enquiries, we suspect that mortgage approvals have further to fall over the coming months.”
But Legal & General Mortgage Club director Jeremy Duncombe is more optimistic.
Duncombe says: “The remortgaging market has remained strong over this period, with lenders continuing to offer competitive deals.
“Though there has been some concern about the impact of uncertainty following the vote, demand for property is still there and the fundamentals of the market continue to be positive in the face of Brexit.”
Anderson Harris director Jonathan Harris says: “‘Now the vote is out of the way but we are into the summer when you would expect to see lower volume of transactions as everyone heads off on their holidays.
“September’s data will give a much better indication of how recent events have impacted the housing market.”