While home loan approvals in the UK recovered slightly from a 15-year low in July, they remained below their long-term average, according to the British Bankers’ Association (BBA).
Last month, 55,634 mortgages valued at £7 billion (S$13.83 billion) were approved, up from 51,000 in June, which was the lowest recorded figure by the BBA since 1997.
However, loan approvals for home purchases in July were 17 percent lower than the previous year, with the average amount disbursed standing at £161,100 (S$318,264).
“Weak economic growth in the UK and the ongoing Eurozone crisis are fuelling uncertainty and a lack of consumer confidence,” said Jonathan Harris, Director of Mortgage Broker Anderson Harris.
“More borrowers are choosing to overpay on their mortgage and reduce their outstanding debt and borrowing costs where they can, rather than take on new loans,” Harris added.
David Dooks, Director at BBA, said: “We continue to see the household sector increasing deposits and repaying debt. High street bank ISAs (individual savings accounts) continue to attract strong personal deposits while repayments of both mortgages and unsecured lending have grown strongly this year as households seek to reduce borrowing and borrowing costs.”
Related Stories:
Fannie Mae tightens lending standards
Aussie low-doc borrowers more likely to default