Mortgage approvals '˜fall to a three-month low'

The British Bankers’ Association (BBA) said 42,613 loans were approved for house purchase last month, marking a 4.6% fall compared with February 2016 and the lowest monthly total since November.

Re-mortgage approvals were also “well down” on January the BBA said.

Some 25,414 re-mortgage approvals were recorded in February, compared with 28,088 in January.

The Council of Mortgage Lenders (CML) said this week that home buyers are facing “mixed fortunes” in the current housing market.

Mortgage rates remain at ultra-low levels, but the CML warned that a lack of people putting their homes up for sale could be an obstacle in the coming months.

The BBA’s figures also show that consumer credit increased by 6.6% annually in February.

It said that within this growth, there was some slackening in the annual increase for personal loans and overdrafts, while growth in credit card borrowing strengthened slightly.

Meanwhile, the BBA said borrowing by non-financial companies decreased by £1.6 billion in February, reflecting a cautious approach to borrowing.

Eric Leenders, the BBA’s managing director for retail banking, said: “Elevated approval volumes for house purchases and re-mortgaging experienced during the winter months fell back in February, to average levels seen throughout most of last year.

“Consumers’ use of credit cards and personal loans reflect last month’s increased spending figures.

“Businesses continue to exercise a cautious approach to borrowing, using cash reserves and alternative lending sources to finance their operations.”

Howard Archer, an economist at IHS Markit, said: “The February slowdown in mortgage approvals for house purchases reported by the BBA fuels our belief that the housing market will come under increasing pressure over the coming months.