Mortgage approvals sink to 19-month low
The number of mortgages being approved to home buyers in August hit its lowest level since January 2015, according to a high street banking report.
Loans for house purchases sunk to a 19-month low of 36,997, falling from 37,672 in July and 39,787 in June, figures from the British Bankers' Association (BBA) said.
Mortgage approvals for house purchases were also down more than a fifth compared to August 2015, when the figure was 46,785.
The report comes as the property market continues to react to April's stamp duty rise, and uncertainty triggered by Britain's vote to leave the European Union.
Gross mortgage borrowing grew 1% to £12.4 billion over the period.
BBA chief economist Dr Rebecca Harding said the findings pointed to a softening in the housing market.
She said: "Mortgage borrowing is growing at a slower pace than it has for the last few months, reflecting both the slowdown in housing market growth after the April spike and broader trends in the sector."
However, ultra-low interest rates helped consumer credit levels increase, notching up more than 6% annual growth in August.
Growth in consumer credit dovetails with robust retail sales in the aftermath of the Brexit vote, the BBA said, while the appetite for personal loans and overdrafts has held up thanks to the cheap cost of borrowing.
Borrowing by non-financial companies continued to expand, edging up 3.8% on the year, but growth levels experienced a marked slowdown compared to the annual rate of 10% in 2015.
Dr Harding added: "Given the low interest rate environment and high levels of confidence during the summer, the strong credit growth can be interpreted as strong consumer sentiment.
"Company deposits grew at an annual rate of 3.8% in August 2016 compared to 9% in August 2015, suggesting that companies may be using their own internal resources to fund working capital and growth requirements."
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said it was too early to see the impact on the housing market from the Bank of England's decision in August to cut interest rates from 0.5% to 0.25%.
He said: "T he outlook for stagnation in households' real incomes next year, as inflation picks up and hiring slows sharply, points to a prolonged period of weakness in mortgage lending ahead."