Mortgage approvals dip for third consecutive month

The number of mortgage approvals for house purchase fell for the third consecutive month in June but property professionals remain optimistic about the second half of the year.

The latest Bank of England figures show there were 59,976 mortgage approvals during June, down 0.3% on a monthly basis.

The figure was up 11.7% annually though.

Commenting on the data, Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “Mortgage approvals are always a reliable indicator of future market activity. However, it is inevitable with so much talk of lower base rates over the past few months that buyers will delay moving plans if mortgage costs are likely to be lower in the near future.

“These figures only tell part of the story as they don’t include about 35% of those who are buying and not reliant on finance. Overall, in our offices, we are seeing a steady, not spectacular picture, and if anything summer holidays have arrived early as the market comes to terms with a similar but slightly different post-election mindset."

Nick Winter, financial planner at Quilter, highlighted that the level of mortgage borrowing is still on the rise even if approvals are slightly down.

He said: “The housing market appears to gradually be gaining momentum. Individuals borrowed, on net, £2.7bn in mortgage debt in June, more than double the £1.3 billion seen in May. The annual growth rate for net mortgage lending also saw a further rise to 0.5% in June, up from 0.3% in May.

“Buyers have been taking a very cautious approach amidst an unpredictable economic outlook and fluctuating mortgage rates, but it seems the prospect of a new government and hope for increased stability has given buyers some confidence.”