Mortgage approvals at highest for a decade as Brexit deadline looms
The total number of mortgage approvals last month was the highest monthly total for a decade, as the possibility of a no-deal Brexit prompted borrowers to act, new figures show.
There were 95,126 mortgages approved by the main high street banks in July 2019, the highest since July 2009 when there were 99,970 according to UK Finance.
Andrew Montlake, managing director of mortgage broker Coreco, said: “July was the month when the odds of a no-deal Brexit got a lot shorter and this clearly incentivised people to act.
“Borrowers have become increasingly worried that lenders could easily pull down the shutters in the event of a disorderly Brexit and also increase their rates so they’re getting on with it.”
Remortgage approvals were the biggest driver of growth, but new home purchases also contributed to the rise.
Compared to the same month last year, home purchases loans were 16.4% higher, remortgage approvals up 19.4% and other secured borrowing 12.7% higher.
Tim Waterlow, development director of lifetime mortgage provider Responsible Lending, said: “Mortgage approvals haven’t reached these dizzying heights since the depths of the financial crash so it’s quite remarkable it’s taken us a decade to get here.
“This fact alone drives home the long-lasting impact the crash has had on the housing market and, with murmurings around Europe of more economic turmoil, lenders will be hoping this is not a peak before yet another collapse.”
Meanwhile, credit card spending reached a record £12 billion, up 8.2% on July 2018.
UK Finance said a record high of repayments showed that consumers were managing their finances effectively.
Personal borrowing through loans was 9.3% higher than last July, but remained lower than levels seen between 2015 and 2017.
Gareth Lewis, commercial director of property lender MT Finance, said: “The biggest worry is that people borrow beyond their means and then there is a fallout from Brexit leading to a dip in the economy but borrowers aren’t leveraging themselves too highly.”