Concerns have been raised by the industry body UK Finance this week over the future of the UK housing market in the face of Brexit woes. It was revealed that in February British banks had approved fewer mortgages in February 2019 compared to the month previously. In data provided by the industry body, taken from statistics from high-street banks including Lloyds, RBS, Santander UK, TSB, Virgin Money as well as Barclays, banks had approved 39,083 UK mortgages for the last month, comparatively, they granted 39,910 in January. Nevertheless, the numbers are still up from the year previously, where 38,555 mortgages were approved in the same month in 2018. however, overall, it is the lowest number of mortgages approved since 2013.
A weakening housing market?
The statistics provided by UK Finance (which was formed a part of a merger of the British Bankers’ Association and the Council of Mortgage lenders) are emblematic of a weakening housing market in many peoples eyes.
For example, it was also revealed the net mortgage lending had increased by 711 million pounds, but it isn’t as good news as it appears to be. This growth is, in fact, the smallest rise since just before the Brexit vote. It is also around half the size of the increase in the majority of last year.
Consumer credit growth slowing down
As Brexit looms ahead, people are reining in on their spending too, which could, later on, end up further impacting the housing market. The UK Finance data had also revealed that consumer credit growth had risen by just 3.8 per cent in February compared to the month last year. This has been revealed as the smallest increase since October.
What will happen next?
Until clear decisions have been made regarding the outcome of the EU referendum, experts believe that mortgage approvals and consumer credit growth will remain slowed down. Buyers are still very much wanting to see how political developments end up unfolding before putting down their hard-earned cash on a house, or before spending like before.