The Bank of England has revealed that net borrowing of mortgage debt by individuals decreased to £4.1 billion in April, down from £6.4 billion in March.
Mortgage approvals for house purchases also decreased to 66,000 in April from 69,500 in March. Both measures are slightly below their 12-month pre-pandemic averages up to February 2020.
Consumers borrowed an additional £1.4 billion in consumer credit, on net, of which £0.7 billion was new lending on credit cards.
Large non-financial businesses’ borrowing from banks rose to £2.7 billion in April from £1.8 billion in March, while small and medium sized businesses repaid £0.5 billion of bank loans. Private non-financial companies (PNFCs) redeemed £1.9 billion in net finance from capital markets.
Steve Seal, CEO, Bluestone Mortgages, said: “Despite a dip in mortgage lending due to the current inflationary environment, it’s clear that the homeownership dream lives on. However, as the cost of living crisis continues to put a squeeze on household and personal finances, we expect to see a growing cohort of customers locked out of the mainstream mortgage market.
For these individuals, it’s important to know that hope is not lost. Specialist lenders can cater to their needs and have a range of solutions to help those who are looking to climb onto or up the property ladder, no matter what their financial situation. Ultimately, all lenders have the responsibility to make sure customers are pointed in the right direction so that everyone has the equal opportunity to secure their homeownership dreams.”
Kay Westgarth, head of sales at Standard Life Home Finance, added: “While the mortgage market remains resilient, today’s figures suggest that overall growth is slowing after 2021’s post-pandemic stamp duty holiday fuelled increases. That said, with there continuing to be an under-supply of housing in the UK, while the market may slow, we are unlikely to see significant downward movement in prices.
“As the energy price cap is once again set to rise in October 2022, we might expect a gradual uptick in older borrowers exploring the later life finance market as an option to augment their income. Benefitting from the historical buoyancy of the market, older homeowners are in a strong position to consider using some of the equity tied up in their property to finance the comfortable retirement they deserve.
“When increases in living costs and spiralling inflation are already pinching savings and pension pots, the value of expert advice is clearer than ever. All advisers need to be speaking to their clients about their options to ensure that they take a holistic view of their assets.”