UK Finance has reported a large increase in mortgage approvals.
There were 85,880 mortgages approved by the main high street banks in September 2019. Mortgage approvals for home purchase were 13.5% higher, remortgage approvals were 23.4% higher and approvals for other secured borrowing were 8.5% higher than in September 2018, which was a particularly subdued month for the mortgage market.
Gross mortgage lending across the residential market in September 2019 was £22.3 billion, 3.7% higher than in the same month in 2018.
David Copland, director of mortgage services at TMA, said: “With a general election looming, housing and homeownership will undoubtedly be high on the political agenda. Today’s figures show that despite this uncertainty, consumers still have an appetite to borrow, and lenders still have an appetite to lend. Advisers, too have a pivotal role in this process, ensuring that borrowers looking to move or remortgage have access to the best deals in the market.
“Listening to customer demand will be key for both lenders and advisers if today’s positive level of lending is to continue. With the sector committed to producing top quality solutions, consumers should feel confident that their needs remain at the forefront of the industry’s mind – no matter what the coming months have in store.”
The £11.0 billion of credit card spending in September 2019 was 10.1% higher than in September 2018. Repayments have remained in line with credit card spending, showing that consumers are managing their finances effectively overall. The level of credit card borrowing grew by 3.0% in the year to September 2019.
Personal borrowing through loans in September 2019 was 9.8% higher than in the same month a year earlier. Overdraft borrowing was 5.2% higher in September 2019 than in the same month a year earlier, while the longer-term trend has seen overdraft borrowing decline.
Personal deposits grew by 1.7% in the year to September 2019. Three-quarters of deposits were held in immediate access accounts in September 2019, in line with the same period last year.
John Goodall, CEO and co-founder of Landbay, added: “In many ways this uptick in mortgage lending doesn’t come as a surprise. Despite the continuing economic uncertainty, the truth is that demand remains strong with buyers and there is an increasing number of competitive mortgage out there for them to choose from.
“Similarly, it appears that some would-be buyers are getting tired of waiting for the Brexit dust to settle and have decided to make their move. Considering the current low interest rate environment, this could be a very wise decision in the medium term.
“To be clear, this increase in lending activity should be welcomed with open arms considering how crucial it is to maintaining the resilience of the UK’s residential property market, which is so critical to the wider UK economy.
“Looking forward, as we edge towards Christmas and a potential general election, it will be interesting to see whether other would-be buyers decide to strike – or choose to hold-off until things become clearer.”