House purchase approvals dropped by more than a fifth in August, according to figures from the BBA.
The number of approvals was down by 21 per cent as compared to August 2012. In the first eight months of this year, approvals were two per cent lower than in the same period of 2015.
Net mortgage borrowing in August was just under three per cent higher than last year, the BBA said. Gross mortgage borrowing hit £12.4bn in the month, up one per cent as compared to August 2015.
BBA reports 37k mortgage approvals in August, lowest since January 2015 and the third consecutive monthly fall. pic.twitter.com/BePNB38x4f— Rupert Seggins (@Rupert_Seggins) September 26, 2016
Rebecca Harding, Chief Economist at the BBA, said: "The high street banking statistics published today point to a softer housing market, strong consumer credit and slightly weaker business borrowing in August.
"The data was collected before the Bank of England reduced interest rates to 0.25 per cent and so give an indication of some of the underlying pressures that the MPC was responding to when it made this decision.
“Mortgage borrowing is growing at a slower pace than it has for the last few months reflecting both the slowdown in housing market growth after the April spike and broader trends in the sector."
The market slowdown was sparked by the introduction of a higher rate of stamp duty on second homes; buy to let landlords rushed to purchase properties before the tax change came in at the beginning of April.
The Brexit vote also caused a lull in the housing market, but the first figures for September are suggesting that the market is starting to heat up again.
House prices after Brexit: a short history
- In June, RICS predicted house prices would drop for the first time since 2012
- Rightmove report house prices fell by 0.2 per cent in June
- Brexit vote, everyone wants to know what will happen to house prices, so we asked the experts
- FTSE 100-listed housebuilder shares take a tumble
- Data from Halifax shows house prices fell after the Brexit vote
- Mortgage approvals fell to an 18-month low in July
- Nationwide reports house prices went up again in August