Mortgage lending drops in September: UK Finance

New data from UK Finance shows that gross mortgage lending fell in September on a yearly basis.

Across the residential market, £21.5bn was lent out during the month, as compared to the £21.8bn noted in September 2017 – a fall of 1.2 per cent.

Last month, this figure stood at £24.4bn, meaning that today’s figure equates to a monthly fall of nearly 12 per cent.

The data release also shows that the number of purchase approved by in September fell 10.1 per cent on a yearly basis, from 41,529 to 37,352, while the number of remortgage approvals dropped 7.4 per cent across the year, from 29,899 to 27,676.

On a monthly basis, home purchase approvals fell 12.2 per cent, from 42,581 in August, and remortgages were down 14.7 per cent, from 32,457.

Foundation Home Loans marketing director Jeff Knight comments: “The market may seem fairly flat on the face of it, as households continue to be squeezed by inflation and perplexed by market uncertainty. That said, as we head into the winter months viewings and finance applications may increase as prospective buyers prepare to make final decisions. For sellers, it’ll be a case of accepting offers this side of the year, to avoid the market grounding to a complete stand still.”

SPF Private Clients chief executive Mark Harris adds: “’This softening of the mortgage market in September comes as no great surprise as Brexit uncertainty is causing a number of borrowers to defer making decisions. As soon as we have a definite deal, whatever that may look like, we expect to see a bounce as people finally make the decisions they have been deferring.”

Phoebus Software managing director Paul Hunt says: “To say we are heading into choppy waters is probably an understatement as the politics surrounding Brexit negotiations continue to cast doubt in people’s minds.

However, with mortgage lenders having quotas to fill and targets to hit, we could see a raft of deals coming to market to tempt.”

Meanwhile, Just Mortgages and Spicerhaart group operations director John Phillips says: “These figures suggest that the current political uncertainty is continuing to have a negative impact on the housing market while the upcoming Budget – which may include further housing incentives – may also be a factor in why things have slowed down.

The fact remortgaging has dropped, however, is the main difference here as house purchase figures have been falling for a while. There was a flurry of remortgage activity in the months preceding the recent rise, so the fact remortgage is down, is likely to do with that more than any marked trend.”

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