New home mortgage approvals inched higher in October, the latest data shows.
High street bank lending for house purchases grew by 3.6 per cent compared to the same month in 2017, UK Finance figures released today demonstrate.
However, remortgaging approvals fell by a huge 13.5 per cent, with total mortgage approvals down 4.1 per cent.
But gross lending across the residential market climbed 5.6 per cent year on year to £25.5bn.
Eric Leenders, managing director of personal finance at UK Finance, said: “Overall mortgage lending grew in October, despite an uncertain economic environment, while house purchase mortgage approvals by the main high street banks were also up on the previous year.
“However remortgaging activity has softened, following a period of strong growth driven by fixed rate loans reaching maturity and anticipation of August’s base rate rise.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, said that while new house purchases were up, the figures reflect caution in the market that sale prices are being negotiated down by savvy buyers.
"This may be a little better than many expected but confirms what we have seen on the ground - that some sellers are taking a reality check and recognising that the difference between sale price and purchase price is much more important than the headline figure," he said.
"First-time buyers too are taking advantage of low mortgage rates, ample loan products and a slight easing of the affordability squeeze."
Meanwhile, credit card spending grew 12.1 per cent to £11.3bn for the month, and personal loans and overdrafts climbed 2.3 per cent in the year to October.
Personal deposits grew by 0.8 per cent while savings held in instant access accounts stood 2.6 higher than last October.
“Households are taking a measured approach to credit, with repayments on credit cards broadly in line with spending,” said Leenders.
“This reflects the growing preference of customers to use their credit cards as a means of payment rather than a borrowing mechanism, making the most of additional consumer protections and value-added benefits.”
Businesses borrowed less, UK Finance said, with lending falling by 1.9 per cent in the last 12 months.
Manufacturers bucked the trend to borrow 6.9 per cent more than the previous year, however.
“Appetite for finance among business remains subdued,” said Stephen Pegge, managing director of commercial finance for UK Finance.
This article was originally published HERE.