MORTGAGE approvals hit record lows at the end of 2017, new lending data reveals.
Figures from trade body UK Finance, released on Thursday, showed that banks approved 36,115 mortgages in December – the lowest figure since April 2013.
The value of approvals was also down to £7.02bn, the lowest level since September 2016.
“December is traditionally a quieter month for mortgages, although the underlying trend of increased numbers of first time buyers, supported by government initiatives such as Help to Buy, continues,” Eric Leenders, managing director for personal finance at UK Finance said.
“Mortgage rates remain low, driven by a competitive market, so customers should shop around for the best deals.”
Economist Howard Archer from the EY ITEM Club suggested that the figures showed that the UK housing market has been impacted by the Bank of England’s first rate hike in a decade last November.
However, John Goodall, chief executive of peer-to-peer buy-to-let mortgage platform Landbay, said more growth was on the horizon.
“Mortgage lending volumes rode a steadily rising tide of first-time buyer and remortgage demand in 2017, and borrowing levels have continued to ride that wave in December,” he said.
“People are clearly still eager to take advantage of historically low mortgage rates, and good loan-to-value deals, locking into the security of fixed rate products in the face of a gradually rising base rate.
“The stamp duty cut for first time buyers has brought new buyers into the market, and as far as buy to let mortgages go, we’ve already seen significantly more demand than at this point last year.
“There’s also a raft of two-year fixed deals about to reach maturity following the refinancing rush ahead of stamp duty changes in 2016, so there could still be more growth on the horizon.”