Homebuyer mortgage approvals slumped last month to their lowest level since January 2009, hindered by dismal weather and the extra holiday for the Diamond Jubilee, the British Bankers’ Association (BBA) said today.
Mortgage approvals fell to 26,269 in June from 29,567 in May, posing a stark contrast to the 25 month high of 37,645 recorded in January, the figures show.
June’s total – less than half the average monthly level of 55,696 seen since 1997 – was also down 20.5 per cent year on year, according to the data.
Howard Archer, chief economist at IHS Global Insight, said: “This is an extremely weak performance even allowing for mortgage activity being hit appreciably in June by the public holiday and very bad weather.
“It indicates that that underlying housing market activity is limited following a modest boost to housing activity at the start of 2012 from first time buyers looking to complete before the stamp duty concession ended on March 24.”
Dr Archer said the figures reinforced his forecast that house prices will fall further over the coming months.
“We expect house prices to fall by around three per cent over the second half of the year. Furthermore, we see a growing danger that house prices will soften further in 2013,” he added.
Meanwhile, the banking industry figures also reveal that outstanding unsecured lending fell by 2.3 per cent over the 12 months to June, while personal deposits rose by 5.1 per cent, boosted by strong inflows continuing after the start of the ISA tax year.
BBS statistics director David Dooks said: “Paying off loans or overdrafts and building up deposits is the current consumer ambition.”