Remortgaging approvals are 6 per cent higher than in July 2015 and 21 per cent higher in the first seven months of 2016 than they were during this period in 2015. Britain voted to leave the European Union on June 23 – a decision economists said could tip the economy into recession but which has so far had a tamer immediate impact on consumers than many had predicted.
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High street banks approved 37,662 loans for house purchases last month, down from 39,763 in June and 19 per cent lower than the same month previous year, according to the British Bankers’ Association, the trade body representing major banks.
Housebuilder Persimmon has bounced back after a brief Brexit hit, posting a 19% rise in pre-tax profits this week. “The data does not now suggest borrowing patterns have been significantly affected by the Brexit vote, but it is still early days”, Rebecca Harding, the BBA’s chief economist, said.
The British Bankers’ Association said credit rose 6.4 per cent compared with a year earlier, up from 6.3 per cent in June and the quickest pace since December 2006.
She pointed to recent strong retail sales figures, increasing by 1.4 per cent in July.
The Brexit vote also appears to have done little to change the nation’s shopping habits.
‘Strong retail sales figures appear closely associated with strong consumer credit growth.
June’s data looks like a blip, probably caused by pre-Brexit nervousness.
“On the other hand – despite a small fall from last month – remortgaging is up 13% by value and 6% by number of approvals year-on-year as existing homeowners capitalise on the record low mortgages available”.
Mark Harris, chief executive of mortgage broker SPF Private Clients, commented: “The first set of lending figures post referendum show little signs of panic although those decisions to borrow would have been made before the outcome was known”.
Loans for house purchases were down 5 per cent to 37,662, compared to 39,763 in June.
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However, Samuel Tombs, chief United Kingdom economist of Pantheon Macroeconomics, said the fall in mortgage approvals was clear evidence the Brexit vote was making households reluctant to make major financial commitments.
