The number of mortgages approved by the main high street banks in October dropped by 4.1%, when compared to the number of approvals on October last year, according to UK Finance’s Household Finance Update – October 2018.

However, although approvals for house purchase were 3.6% higher than in the same month last year, remortgage approvals were 13.5% lower, while approvals for other secured borrowing were also down by 1.3%.

Despite the overall drop, the update from UK Finance revealed that lending across the residential market in October was £25.5bn, some 5.6% higher than the recorded figure in October 2017.

Furthermore, the association found that the £11.3bn of credit card spending in October was 12.1% higher than in the same period last year, with the outstanding level of credit card borrowing over the last 12 months growing by 5.7%.

Personal borrowing by way of loans and overdrafts also experienced increases in October, growing by 2.3% in the year.

Personal deposits in total grew by 0.8% over the past twelve months, while deposits held in instant access accounts were 2.6% higher than last October.

Commenting on the findings, UK Finance personal finance managing director Eric Leenders said: “Overall mortgage lending grew in October, despite an uncertain economic environment, while house purchase mortgage approvals by the main high street banks were also up on the previous year.

“However remortgaging activity has softened, following a period of strong growth driven by fixed rate loans reaching maturity and anticipation of August’s base rate rise.

“Households are taking a measured approach to credit, with repayments on credit cards broadly in line with spending.

“This reflects the growing preference of customers to use their credit cards as a means of payment rather than a borrowing mechanism, making the most of additional consumer protections and value-added benefits.”

Also commenting, Just Mortgages group operations director John Phillips: "Today’s UK Finance Figures show a rise in gross mortgage lending and a fall in remortgaging, which is the opposite to what we have seen over the past few months. But rather than celebrating any sea change, I think the figures simply confirm the uncertainly of the economy and the mortgage market. Because, while the figures show remortgaging has fallen, for us, the remortgage market is still very strong, and purchase has subdued a little, but not a lot.

"It is important to keep in mind that this is an overall figure, and we are seeing huge differences across the UK, with London slowing hugely while the North is still fairly strong. I also think what we may be seeing is the traditional end of the year figures coming a little early, but in the current climate, it is very difficult to see any trends at all."

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