In May, individuals borrowed a net £1.2bn in mortgage debt, down from £2.2bn in April, the Bank of England has revealed.
According to findings from the latest ‘Money and Credit’ report, net mortgage approvals for house purchases dropped from 60,800 in April to 60,000 in May, while approvals for remortgaging fell slightly from 29,900 to 29,600.
Net consumer credit borrowing increased to £1.5bn in May, after falling to £0.8bn in April.
In addition, private non-financial corporations raised a net £3.9bn in finance throughout the month, driven by a net issuance of £4.9bn in equity.
This was the first positive net equity issuance since September 2021 and the highest since June 2009.
Reaction:
Nathan Emerson, CEO of Propertymark:
“Although we have seen a real uplift across the sector since the start of the year, recovery can come with ups and downs along the way.
“With the General Election now only days away, we are keen to see more detailed plans and timeframes from any incoming government regarding support for buyers across the coming weeks.
“Propertymark also remains hopeful once conditions are right, we will witness a reduction in the base rate too.”
Jonathan Samuels, CEO of Octane Capital:
“Mortgage approval levels may have fallen marginally over the last two months, however, they remain considerably higher than we’ve seen for quite some time, which demonstrate that the sector is continuing to benefit from a far greater degree of stability since the base rate has been held.
“There is no doubt a ‘wait and see’ element at play here as well, with a segment of buyers putting their plans to purchase on temporary hold ahead of the election.
“So while mortgage approval levels have remained consistent of late, we expect to see further growth in these numbers as the year progresses.”
Jason Ferrando, founder and CEO of easyMoney:
“Mortgage market activity remains robust and it’s clear that buyers are continuing to act with greater intent with a fourth month of approval levels sitting around the 60,000 mark.
“There has been a marginal decline over the last two months and this is largely due to the expectation that an interest rate cut is imminent, with some buyers holding out in hope of lower mortgage rates.
“When such a cut does materialise, it’s likely to spur these buyers to get off the fence and transact, at which point mortgage approval numbers will start to climb once again.”
