Mortgage approvals fall to lowest level since May 2015, although lending growth remains robust - EY ITEM Club
29 July 2016
- Mortgage approvals fall to the lowest level since May 2015…
- …although lending growth remains robust
- Other evidence presents a mixed picture on ‘Brexit’ effect
Martin Beck, senior economic advisor to the EY ITEM Club, comments:
“A fall in mortgage approvals from 66,722 in May to 64,766 in June took approvals to the lowest level since May 2015 and represented the biggest annual decline since March of the same year.
“But attributing this trend to Brexit-related uncertainty is at odds with the growth in lending. Gross mortgage advances rose to £19.3bn in June, broadly in-line with the average over the previous 12 months. And annual growth in consumer credit touched 10.3%, a rate not exceeded since October 2015.
“However, if the results of GfK’s survey of consumer confidence in July are anything to go by, households’ appetite for loans seems set to see a marked cooling. The headline confidence balance dropped from -1 in June to -9, the biggest monthly fall since March 1990. Prospects for lending and the wider economy will depend upon the extent to which this decline reflects the febrile immediate post-referendum atmosphere or proves to be a more persistent phenomenon.”