The number of lending approvals for house purchases fell from by 7,633 to 66,789 in September, new figures from the Bank of England (BoE) show.
Consequently, the value of purchase approvals fell during the same monthly period, from £17.6bn to £15.9bn.
The previous six-month average for this metric is £15.8bn.
On the remortgage side, approvals decreased in September, but only slightly – by 410 to 49,122 – and from a value of £10.7bn to £10.4bn.
Overall net mortgage borrowing came to £6.1bn, on par with August’s figure, beating the past six-month average of £5.7bn. And gross lending amounted to £27bn, above the previous month’s count of £25.9bn.
Phoebus Software chief sales and marketing officer Richard Pike says: “This is the first sign that housing is being affected by the current economic situation. The double hit of rising inflation and increasing interest rates is enough to give pause and, when finances are stretched, moving house falls down the priority list.
“We saw warnings of redundancies from estate agent chains last week, which reflects the ebb in confidence and restricts the number of properties coming to market. We are heading into a traditionally quieter time of the year, but there is still work to be done for brokers and lenders.”
Octane Capital chief executive Jonathan Samuels comments: “A dip in mortgage approvals was very much on the cards, particularly given the turbulence that rocked the sector towards the end of the September as a consequence of the government’s disastrous mini-budget.
“However, while it’s fair to say that the market has shifted down a gear or two, September’s level of mortgage approvals doesn’t sit far off the average level seen over the last 12 months.
“In fact, when you look at historic levels for this time of year prior to the pandemic property market boom, the latest sum of 66,789 actually sits marginally higher than the levels seen in September 2019, 2018 and 2017.
“So while today’s decline will no doubt sow further seeds of panic that a market collapse is on the horizon, what we’re currently seeing at present is very much a return to normality.”
