The Bank of England has reported that the number of loan approvals for house purchase was 67,042 in May, compared to the average of 70,598 over the previous six months.
The number of approvals for remortgaging was 42,919, compared to the average of 41,019 over the previous six months.
Meanwhile, the number of approvals for other purposes was 12,605, in line with the average over the previous six months.
Steve Griffiths, head of sales and distribution at Kensington, said: “Given the uncertainty we have seen in recent weeks, it’s no surprise that these figures show that lending remained stagnant in May. On-going volatility in the UK economy could lead to a continuation of this trend, as buyers decide to put off their next purchase.
“It’s therefore more important than ever for brokers to make the most of every business lead, whether it be a straightforward case or a complex one. With more and more people choosing to pursue self-employment or freelance work, it is crucial that advisers and borrowers alike make themselves aware of the options that are available when it comes to specialist lending.”
Peter Williams, executive director of the Intermediary Mortgage Lenders Association (IMLA), added: “Stamp duty changes for buy-to-let properties and second homes meant there was an air of inevitability about the April dip in mortgage approvals, which has now been followed up by a modest recovery in the lead-up to the UK’s referendum on its European Union membership. House purchase activity hasn’t quite returned to the heightened levels of early 2016, but the homebuyer market has visibly strengthened over the last 18 months.
“Today’s data also shows record remortgage activity with almost 43,000 approvals in May: the highest of the post-Mortgage Market Review (MMR) era. A resurgence in remortgaging has been underway for the last six months, with more than 40,000 loans approved every month since December. It reflects growing opportunity for consumers to use the equity in their homes to switch to a new deal, and growing awareness of the savings on offer while rates are low and lender competition is high.
“A year ago, the UK mortgage market was about to experience a post-election bounce and it seems unlikely that last week’s EU referendum result will produce a similar effect this time round. However, despite inevitable uncertainty as some buyers and sellers wait to see how the dust settles, lenders will be maintaining business as usual. Mortgage rates continue to look attractive and the housing supply shortage means homes appearing on the market are still likely to be subject to considerable demand.”
