Purchase mortgage approvals down in October

The Bank of England have released their monthly statistical report showing that purchase mortgage approvals for October are down slightly, 47,185, compared with September, 47,369. This makes the approval rates for October lower than the previous six-month average of 48,503.
On the other hand approvals for remortgages were up slightly to 29,275 compared with September’s figure of 29,019, higher than the previous six-month average of 27,248.   Conveyancers will wonder if the 4 month upward trend in remortgages will continue.
The figures have been seasonally adjusted. 
The Building Society Association also released figures for building society lending commenting on the figures, Adrian Coles, Director General of the BSA, said: 
“Lending activity across the market has shown signs of weakening in recent months. Although lending by mutuals fell in October, gross lending remains similar to the average over the preceding three months. Reports of falling house prices and government spending cuts have lowered consumer confidence which has put further downward pressure on demand for mortgages.”
Richard Sexton, business development director at e.surv says:
“If you compare approvals with property values, it becomes clear that approvals are actually up for the most expensive properties. Wealthy buyers are using large deposits to side step lending restrictions. Obviously the flip side to this is that approvals for cheaper properties have fallen dramatically. This shows that the market is being driven by the behaviour of lenders and not buyers. Lenders are concerned by their liabilities under the Special Liquidity and Credit Guarantee schemes, and by the arrival of Basel III — we may have to wait for those developments to be worked through before we can see strong house price growth again.”
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