Remortgage approvals drop 12% in a year
The amount of UK remortgage approvals dropped 12% in the 12 months to June, according to the British Bankers' Association (BBA).
While total mortgage approvals (for home purchase and remortgages) rose for the first time in June after four months of decline, there were just 18,645 remortgage approvals during the month, compared to 21,136 a year earlier.
The lower level of remortgage approvals could be the result of the introduction of tougher lending rules that were introduced by the Mortgage Market Review (MMR).
The BBA said the MMR's implementation - which brought in more stringent affordability tests in order to help protect buyers form over-borrowing – "might have" slowed down the number of applications in the early part of the year but it was still too early to say definitively whether it was having an impact.
Approvals for home purchase recovered in June to 43,265 after sitting at around 42,000 in May and April, having dipped from 45,155 in March.
In total, gross mortgage borrowing in June stood at £11.2 billion – 24% higher than it was in June 2013.
While Richard Woolhouse, chief economist at the BBA, said the mortgage figures were encouraging. But he added: "The jury is still out on exactly how the new rules are affecting customer applications or approvals".
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: "There has been much debate over the impact of the new mortgage rules on lending volumes. It is certainly trickier to get a mortgage, with different questions being asked and much more scrutiny of the information provided. However, it is not impossible to get funding and if you use a mortgage broker they will steer your application through."
The BBA also reported higher demand for both personal loans and overdrafts – something it said were a sign of an improving economy and rising consumer confidence.