The number of mortgages approved by high street banks dropped by 10.2% year-on-year during November and the number of remortgage approvals fell by 20.3%, latest official lending data shows.
The figures have been published by industry body UK Finance, which says that despite the alarming reductions, lending for house purchases dropped by only 2.3%, proof that the residential market ‘remains stable’, it says.
But the figures also suggest that direct lending by high street banks is becoming less important to borrowers as new lending platforms and brokers hack away at their market share.
“The slight drop in the number of mortgage approvals reflects the continued stasis in the property market,” says Ross Boyd (left), founder of mortgage switching platform, Dashly.com.
“But the sharp drop in the number of remortgages compared to a year ago is a sign of action not apathy.
“Brexit and the sheer uncertainty of what could happen to the economy in 2019 have seen a significant percentage of households proactively remortgage over the past year.
“Rates are still hugely competitive, and many households have learned the lesson of the global financial crisis, namely that reducing your monthly overheads is invaluable.”
Paul Smith (right), CEO of estate agency chain Haart, says Brexit, whether hard or not, will not create a price crash but instead will reduce the number of transactions in the market.
“While this uncertainty would result in fewer homes coming to market, demand will continue to outstrip supply as, at the end of the day, people will always need to move home for various reasons, which will ensure that prices continue to hold-up regardless of the outcome,” he says.
“The next couple of weeks will prove interesting.”