Mortgage approvals at 19 month low, but consumer credit soars

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The number of people taking out mortgages fell to its lowest level for 19 months in August, according to Britain’s High Street banks.

A total of 36,997 homeowners had their mortgages approved, the British Bankers Association (BBA) said.

That is the lowest figure since January 2015, and a 21% drop on August 2015.

The number of people borrowing to buy a house or flat has been falling since April, when there was a rush to buy property ahead of stamp duty changes.

“Mortgage borrowing is growing at a slower pace than it has for the last few months reflecting both the slowdown in housing market growth after the April spike and broader trends in the sector,” said Rebecca Harding, chief economist at the BBA.

Consumer sentiment

However UK consumers are continuing to borrow more on credit cards and through loans and overdrafts.

The total amount of consumer credit grew by 6.4% in the year to August, the fastest rate of growth for nearly ten years.

“Given the low interest rate environment and high levels of confidence during the summer, the strong credit growth can be interpreted as strong consumer sentiment,” said Ms Harding.

The figures do not include lending by UK building societies, which account for about a third of mortgage borrowing.

Mortgage approvals at 19 month low, but consumer credit soars

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