Mortgage loans slump to 15-month low

MORTGAGE lending hit a 15-month low in November, figures from UK Finance, the banking industry body, revealed yesterday.

In total, 39,507 house purchases were approved by banks in November, down from 40,417 in October, as well as the six-month high of 41,791 August.

This is significantly below the longterm average of 51,673 mortgage approvals for the month. But overall lending for the year to date looked strong. Banks look set to exceed £250bn in gross mortgage lending for the first time in a decade, driven by remortgaging activity, as people secured low interest rates in the months ahead of a much-anticipated hike by the Bank of England, according to UK Finance.

Remortgaging approvals were at 33,670 in November, up on the monthly average of 28,715 over the previous six months and 24pc higher than in the same month last year.

Howard Archer, of EY Item Club, said: “The fundamentals for house buyers are likely to remain challenging over the coming months, with consumers’ purchasing power continuing to be squeezed by inflation running higher than earnings growth.”

Mr Archer added that housing market activity “is likely to be hampered by fragile consumer confidence and limited willingness to engage in major transactions”.

Zoopla, the online property firm, yesterday reported the housing market has grown 3.5pc in 2017, despite a slowdown in London and the South East.