Mortgage approvals at highest level for a decade

Mortgage approvals have risen to the highest monthly level in more than decade, despite uncertainty over Brexit.

UK Finance says there were 95,126 mortgages approved by the main high street lenders in July, the highest since the corresponding month in 2009.

Mortgage approvals for home purchase were up 16.4%, with remortgage approvals increasing by 19.4% on the same month a year earlier.

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Speaking to Sky News, the chief economic adviser to EY Item Club, Howard Archer, said that the impending Brexit deadline might be driving the rise.

“It is possible that mortgage activity is being lifted by some people looking to complete their house purchases before Brexit occurs on 31 October, given the major uncertainties as to what will actually happen then,” he said.

Andrew Montlake from mortgage broker Coreco agreed, telling The Mirror the increasing likelihood of a no-deal Brexit had “clearly incentivised people to act”.

However, he added: “Remortgages were the driving force of the rampant activity levels in July, with households taking advantage of the exceptionally competitive mortgage rates available.”

This is Money points out that mortgage rates are currently at “historic lows,” as “Brexit-related uncertainty” appears to be having “an impact on the types of loans that borrowers are plumping for”.

Analysts say that house prices remain “soft” and look unlikely to rise by more than 1.5% this year. Data released by the Office for National Statistics and HM Land Registry found house prices fell in London, the South East and South West in June compared to 2018.