Mortgage lending slows in September
THE UK mortgage market softened during September, according to the latest figures from UK Finance.
The trade association’s data found that gross mortgage lending across the residential market in September equated to £21.5bn, a 1.2 per cent decrease from the same month last year.
The number of mortgages approved by the main high street banks during the month was 9.1 per cent lower than last September.
Approvals for house purchase dropped 10.1 per cent while approvals for other secured borrowing fell 9.8 per cent.
And remortgage approvals, which had shown strong growth during August, also fell by 7.4 per cent.
“Mortgage lending has slowed down in recent months, suggesting a wider deceleration in the market. Landlords have historically found themselves targets of the budget, so all eyes are on next week’s announcement,” said John Goodall, chief executive of peer-to-peer buy-to-let lender Landbay.
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“Regulatory changes, extortionate stamp duty, and Brexit have all contributed to a slump in the mortgage market.
“It is clear that now is not the time for the chancellor to make changes or he runs the risk of further damaging the private rental sector. The only sweetener would be a reduction or removal of stamp duty, which would provide a much needed boost for the market.”
UK Finance’s September update also showed that growth in demand for business borrowing had been driven by manufacturers, agriculture and accommodation.
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However, growth in these sectors is in marked contrast to a wider two per cent contraction in UK business borrowing overall.
“Net lending to businesses grew for the fourth consecutive month in September, with total borrowing by non-financial companies increasing by £597m,” said Stephen Pegge, managing director, Commercial Finance at UK Finance.
“Economic uncertainty continues to impact on businesses’ appetite for finance as overall lending remains slightly below the same period last year.
“However within sectors, the manufacturing, agriculture, accommodation and food services sectors have all seen lending grow year on year.
“Growth of business deposits has picked up slightly compared to recent months, suggesting firms are adopting a ‘wait and see’ approach to investment decisions.”
Read more: Manufacturers boost business borrowing in June