Banks approved the least number of new home loans for nine months to June, adding to evidence of further cooling over the UK lodging market.
Information published by trade association UK Finance demonstrated that banks gave approval to 40,200 home purchases in June, a fall from 40,287 in May.
That is the most minimal level for new home loan approvals since September – when approvals dropped to 38,893.
Gross home loan for June was in accordance with the earlier month at £13 billion, versus £13.2 billion in May, yet denoted a 6% jump from levels recorded for June 2016.
Analysts are currently expecting a further slowdown in the lodging market, which has just hinted of cooling.
Chief UK economist at Pantheon Macroeconomics, Samuel Tombs, stated: “The mortgage market remained subdued in June and looks set to weaken further over the coming months.”
He indicated the Bank of England’s most recent credit conditions study, which demonstrated that most lenders intend to curtail the supply of secured credit in the coming months for the first time in three years, while the number of potential buyers begins to decline.
Mr Tombs said an effective cut to real pay, which is being outstripped by inflation, would also hit the demand.
“With mortgage rates likely to stabilise over the coming months and real wages set to fall further, we expect mortgage lending to continue to cool in the second half of 2017.”
The squeeze on families also hit growth in consumer credit, which increased 1.9% year-on-year, as opposed to 2.1% in May.
It was driven by the further contraction in individual loans and overdrafts, which fell from negative 0.8% to negative 1.3%.
On the other hand, annual credit card lending grew by 5.5% on a yearly basis.
The head of personal finance at UK Finance, Eric Leenders, stated: “June saw consumer borrowing from high street banks, which accounts for 45% of the overall credit market, maintain its slower pace as rising inflation put pressure on household incomes.”
UK Finance, which released the information, is another body that has gone up against a number of activities that was carried out by six industry bodies including Asset Based Finance Association (ABFA), the British Bankers’ Association (BBA), the Council of Mortgage Lenders (CML), Financial Fraud Action UK (FFA UK), Payments UK and the UK Cards Association.