Bank of England says UK mortgage approvals fell to 18-month low in July

Mortgage approval fell to their lowest level since January 2015 last month, figures released by the Bank of England today (30 August) show.

According to the BoE, the number of mortgage approvals fell from 64,152 in June to 60,912 last month, falling short of analysts' expectations of 62,000. By comparison, the first quarter of 2016 total of 216,575 had been the highest quarter for mortgage approvals for house purchases since the fourth quarter of 2007.

Some analysts suggested that mortgage approvals will continue to fall even further over the short-term future, as the uncertainty triggered by the Brexit vote has already had a negative impact on new buyer enquiries.

"With Brexit uncertainty having driven new buyer enquiries lower in recent months, we suspect that mortgage approvals have further to fall over the rest of the year," said Scott Bowman, UK economist at Capital Economics.

Howard Archer, chief UK and European economist at IHS Global Insight, said the slowdown in mortgage approvals was further proof that house prices could ease back by around 3% over the latter months of 2016 and there could well be a further 5% drop in 2017.

"Housing market activity is likely to be limited over the coming months and prices will weaken as heightened uncertainty following the UK's vote to leave the EU weighs down on consumer confidence and willingness to engage in major transactions, and also hampers economic activity," he explained.

Meanwhile, the BoE added that net consumer credit rose by £1.2bn ($1.6bn, €1.4bn) last month, significantly below the £1.7bn increase analysts had expected and the smallest increase since August last year.