Recent data indicates that mortgage approvals fell in July, although credit growth had increased, suggesting that people were still making smaller purchases while avoiding property investments following the vote to leave the EU.
In July, banks in the UK have approved the lowest number of mortgages this year so far, with 37,662 approvals in July compared to 39,763 in June. The number of approvals by UK banks is 19% lower than in July last year, according to the British Bankers’ Association.
Experts believe that there was a delay in people making decisions to buy property during the weeks after the Brexit vote. However, data indicates that there had been strong growth in consumer credit, especially credit card debt. This demonstrates that smaller purchases made by consumers hadn’t been affected by the referendum.
In July this year, net credit card debt increased by 20% in comparison to the same month last year, and £291m more. In June net credit card lending increased by £283m. Despite warnings that voting to leave the EU could result in a recession, recently released data from the biggest house builder in Britain, manufacturers and UK supermarkets shows that the UK won’t enter a recession during the second half of 2016. Chief economist at BBA, Rebecca Harding, said that increased short term borrowing gave little indication of the mood of bank customers in the UK.
People who are planning to buy a home should seek advice from a mortgage adviser, as they have undertaken robust training with a CeMAP course, and can offer impartial advice.
