The number of home loans getting the green light from lenders has been depressed since peaking at 72,343 in August last year immediately before the disastrous mini-Budget.
Before the pandemic they were running at 60,000 to 70,000 a month, but the market is currently being hammered by the highest mortgage rates since the global financial crisis.
Yesterday property website Zoopla forecast the number of homes g bought and sold this year will to fall to one million, 21% down on last year and the lowest since 2012.
David White, chief operations officer at broker Simply Lending, said: ”This data from the Bank of England confirms exactly what we’re seeing on the ground. We’ve seen a drop of 31% in mortgage approvals for house purchase during July and August to date.”
Stephen Perkins, managing director at broker Yellow Brick Mortgages, said: “The confidence to buy simply isn’t there right now. Many people seeking to remortgage are having to stay with their existing lender due to affordability and criteria restrictions. “Fortunately, as lenders are desperate to hit lending targets, as seen by recent rate reductions, they are offering very competitive rates for customers to stay with them at present.”
Mark Harris, CEO of mortgage broker SPF Private Clients, said: “Mortgage approvals fell in July as buyers remain concerned as to what’s going on in the wider economy and what they can afford. “The average rate on new mortgages continued to rise in July, increasing by three basis points to 4.66%. The worst of the pain may not be over with the markets expecting the Bank of England to raise the base rate again next month.”
Meanwhile, separate projections showed spend on UK commercial property could fall to £41 billion in 2023, down a third on last year, as a number of investors pull back from decisionmaking amid volatile conditions. The forecast from property agent BNP Paribas Real Estate said the figure was also below the long-run average.