Mortgage approvals soaring as borrowers rush to beat deadline
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 – 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 per cent higher, remortgage approvals up 19.4 per cent and other secured borrowing 12.7 per cent 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 marketand,withmurmurings 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 per cent on July last year.
UK Finance said a record high of repayments showed consumers were managing their finances effectively.
Personal borrowing through loans was 9.3 per cent higher than last July, but remained lowerthanlevelsseenbetween 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.”