Net approvals for remortgaging fell to the lowest level since 2012, the Bank of England said.
Around 45,400 mortgages for house purchase were approved in August, marking a six-month low, the Bank of England said
Net approvals for remortgaging, which only capture remortgaging with a different lender, dropped from 39,300 in July to 25,000 in August – the lowest tally since July 2012. Kevin Brown, savings specialist at Scottish Friendly, said: “The collapse in remortgages reflects the effects of rising bank rates on households.
“However, borrowing costs are still set to be much higher than only a year or so ago. With the labour market weakening and sentiment around the housing market poor, the EY Item Club doubts a fall in mortgage rates will be enough to trigger much of a revival in activity.” There were also signs of households raiding their savings and relying more heavily on credit in August in the Bank of England’s figures contained in its Money and Credit report.
Myron Jobson, senior personal finance analyst at Interactive Investor, said: “The uptick in withdrawals from savings accounts in August is indicative of the fact that many households are still allocating a sizeable chunk of their income towards covering basics necessities – with the soaring cost of housing, be it mortgage repayments or rent, a particular pain point. This leaves them with less disposable income to save.
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