Mortgage borrowing down 4% in year to October, says BBA

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Gross mortgage borrowing reached £12.2bn in October, 4 per cent lower than the same month last year, according to the latest British Banker’s Association figures.

House purchase approvals were also down, falling 10 per cent in the year to October 2016.

Remortgage approvals were simililar to those in October last year but were 13 per cent higher in the first 10 months of the year than in the same period last year.

Speaking about the latest BBA figures, Bluestone Mortgages managing director Matt Andrews says: “An annual decrease in mortgage approvals reflects a more cautious approach from lenders, likely as a result of the current uncertainty in the housing market and wider economy.  However, fewer approvals and the continuing squeeze on affordability is pricing an increasing number of would-be homeowners out of the market.

“The borrowers who are set to suffer the most under these conditions are those who do not fit traditional high-street lending criteria. Automated credit scoring models seldom take into account the nuances often found in the credit profiles of contractors, the self-employed, or those with adverse histories.”