e.surv predicts July mortgage approval drop

Chartered surveyor e.surv has predicted a monthly dip in the number of mortgage approvals in July, ahead of the release of official figures.

According to calculations from its own data, e.surv estimates there to have been 1.8% fewer mortgage approvals in July than in June, bucking the upward trend that had persisted for the previous eight months.

E.surv predicts there were 65,356 house purchases mortgage approvals in July, down from 66,582 in June.

Richard Sexton, director of e.surv, said: “The Bank of England has been beating the drum over a base rate rise that has yet to appear. Their hawkish rhetoric has had a knock-on effect on the mortgage market, with some banks beginning to withdraw their lowest-interest mortgage deals.

“In turn, this appears to have dampened demand for house purchase lending in the short-term, whilst stimulating remortgage activity.”

However he added: “The mortgage market should be resilient in the face of this threat. Reforms like MMR introduced since the recession have left us with a market built to ride out storms.

“Any increase to the base rate is likely to be slow and steady. The Bank of England have as much reason as anyone to be careful about rocking the boat.

“With incomes rising and inflation staying low, many borrowers have been making hay while the sun shines and paying down their mortgages, while others have been taking the very sensible decision to lock in to low rates.”

The figures also say there was a fall in the number of small-deposit borrowers in July – those with a deposit worth 15% or less of their property’s total value. It says that, on average, 16% of approved UK loans were for those paying small deposits – compared to 17% in June, with the biggest drops in the East of England and in Scotland.

The e.surv predictions come ahead of the release of the Bank of England’s Mortgage Lenders and Administration quarterly statistics in September.

 

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