Mortgage approvals fell in August but brokers and advisers confident about the future

Mortgage approvals fell to £3.9 billion in August, but this followed a strong net flow of £4.5 billion in July, so the figure remains in line with the post 2016 average, according to the Bank of England’s latest Money and Credit statistical release. The industry has responded positively to the figures, hailing them as a sign of the market’s strength in difficult times.

The annual growth rate in mortgage lending remains 3.2 per cent, in line with averages stretching back over the past three years. Andrew Montlake, managing director of mortgage broker Coreco said the figures showed the mortgage market holding up “fairly well” in August in the context of the usual seasonal drop-off in activity and the impact of economic factors including ongoing Brexit uncertainty.

“Three years of delay and indecision have created a phenomenal amount of pent-up demand and that saw house purchase mortgage approvals in August stay at the six-month average,” said Montlake. “Expect mortgage approvals in the autumn and winter to be even more robust, as mortgage enquiries for home purchase really picked up in September. Despite a backdrop of political, economic and now constitutional chaos, the property and mortgage markets are ticking along quite well. There may be gridlock in Westminster but most Brits are now getting on with their lives.”

David Copland, director of mortgage services at The Mortgage Alliance (TMA) also saw reasons to be cheerful about opportunities for lenders and advisers in the near future.

“Whilst mortgage lending in August weakened, attractive deals, increased lender competition and the economic climate are incentivising people to act,” he said. “Mortgage advisers are steering borrowers in the right direction and finding the best product for their circumstances.

“Remortgage business is a clear opportunity. Now is the time for advisers to be contacting any customers who are approaching the end of their term. According to recent market data, £77.5 billion of residential and buy-to-let business is set to mature between September and the end of the year. That’s a huge opportunity for mortgage advisers.”

Vikki Jeffries, proposition director at PRIMIS, suggested that mortgage advisers and networks were playing an important role in maintaining this positive picture. “Mortgage advisers are continuing to do a great job of securing the right deals for borrowers – despite the political and economic uncertainty,” she said. “What the industry needs to ensure now is that advisers feel supported enough to continue producing the best outcomes for customers. Networks play a key part here in providing advisers with access to the guidance and tools they need. If advisers get the right level of support, there’s no reason why today’s encouraging lending figures shouldn’t continue.”

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