The British mortgage market fell to its weakest in nine months in June, with approvals for house purchases now 9.3 per cent lower than their peak in J
The British mortgage market fell to its weakest in nine months in June, with approvals for house purchases now 9.3 per cent lower than their peak in January.
The number of house purchase mortgage approvals fell to 40,200 in June, down from 40,350 in the previous month, according to British Bankers’ Association (BBA) figures published by UK Finance.
The pace of house purchases tracked by the BBA peaked in January above 44,000, but has since fallen steadily, with June the weakest month since September.
That reflects the broader but less timely measure by the Bank of England which found house purchases fell over the first five months. The latest Bank data will be published on Monday.
Separate data from HM Revenue and Customs last week showed a similar fall, with a lack of supply pushing up prices and weighing on demand. The BBA figures show the average house price was £194,000 in June.
The overall value of mortgage approvals did increase slightly, from £12.7bn in May to £12.9bn in June, although that remained just below the £13bn six-month average.
Concerns around the housing market have increased in recent months in the face of rising inflation.
Howard Archer, chief economic advisor for EY Item Club, said: “The fundamentals for house buyers are likely to remain weak over the coming months with consumers’ purchasing power continuing to be squeezed by inflation running higher than earnings growth.”
“It is also very possible that the labour market will increasingly falter despite its current resilience.”
The BBA figures also show that consumer credit growth slowed, with annual growth in consumer credit slowing from 2.1 per cent to 1.9 per cent.
The slowdown follows warnings from the Bank of England that some sectors within consumer lending may be building up pockets of risk which could be “dangerous” to the UK economy.
Borrowing through personal loans and overdrafts contracted by 0.8 per cent and 1.3 per cent respectively, although credit card borrowing grew at 5.5 per cent.