According to the trade body, UK Finance, the number of mortgage approvals recorded in September fell year-on-year.
Gross lending across the residential market was at £21.5bn, a 1.2% reduction, while the main high street bank lenders saw mortgage approvals fall 9.1%.
With many rushing to secure a mortgage earlier in the year ahead of the interest rate change, the market did see an unusually high spike in the lead up to August. As a result, a fall in September was always on the cards, but the figures are also consistent with the slower levels of market activity seen over the last year or two.
Many buyers remain hesitant due to the current market uncertainty caused by the political landscape and this has a direct impact on mortgage approvals. However, it is also important to note that mortgage affordability has remained at record lows due to interest rates for quite some time, and although this is still the case, the marginal increases implemented may also have deterred a number of buyers.
With today's budget announcement on the horizon, there could be a further slow in market activity, although the property market is unlikely to feature too heavily – as Yomdel CEO, Andy Soloman, explains…
Andy Soloman, Business Growth Expert at Yomdel, commented:
“While mortgage approvals don’t necessarily paint a full picture of market conditions, they do provide a snapshot of the current property landscape and more importantly, the current level UK home-buyer sentiment.
A reduction was always on the cards given that previous approval levels were heightened ahead of the increase in rates in August. So the market has seen more of a natural adjustment rather than a drastic reduction in buyer activity, although it’s still not firing on all cylinders when compared to previous years.
There is certainly still an appetite for home ownership in the UK, albeit a more selective one at present. While the property market is likely to take a back seat in the new Budget, we could see market activity continue to cool ahead of the announcement at the end of this month.”