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| Mortgage approvals slump to 18-month low | Mortgage approvals slump to 18-month low |
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| The number of mortgages approved for house purchases fell to an 18-month low in June, according to figures from the Bank of England, in a sign the housing market continues to struggle. | The number of mortgages approved for house purchases fell to an 18-month low in June, according to figures from the Bank of England, in a sign the housing market continues to struggle. |
| A total of 44,192 new loans were approved by lenders during the month, down from 50,544 in May and 10.3% lower than the 49,236 recorded in June 2011. | A total of 44,192 new loans were approved by lenders during the month, down from 50,544 in May and 10.3% lower than the 49,236 recorded in June 2011. |
| Poor weather and the extended bank holiday around the Jubilee may have had an impact on homebuying, but a bigger factor is likely to have been the end of the stamp duty holiday for first-time buyers in March. | Poor weather and the extended bank holiday around the Jubilee may have had an impact on homebuying, but a bigger factor is likely to have been the end of the stamp duty holiday for first-time buyers in March. |
| The Bank's figures showed approvals for house purchases reached a 25-month high of 58,183 in January, suggesting some buyers brought forward plans to captalise on the opportunity to save up to £2,500 when buying their first property. | The Bank's figures showed approvals for house purchases reached a 25-month high of 58,183 in January, suggesting some buyers brought forward plans to captalise on the opportunity to save up to £2,500 when buying their first property. |
| The number of remortgage approvals also fell during the month to 24,117 – the lowest number for more than two years. | The number of remortgage approvals also fell during the month to 24,117 – the lowest number for more than two years. |
| The total value of mortgages approved on properties was £83.6bn – a drop of 17.5% on the figure for June 2011. | The total value of mortgages approved on properties was £83.6bn – a drop of 17.5% on the figure for June 2011. |
| The value of gross mortgage lending advanced during the month was £11bn, compared to a previous six-month average of £12.2bn. A total of £11.1bn was repaid by borrowers compared to the previous six-month average of £11.5bn. | The value of gross mortgage lending advanced during the month was £11bn, compared to a previous six-month average of £12.2bn. A total of £11.1bn was repaid by borrowers compared to the previous six-month average of £11.5bn. |
| Howard Archer, chief UK economist at IHS Global Insight, said the slump in approvals "indicates that underlying housing market activity is limited". | Howard Archer, chief UK economist at IHS Global Insight, said the slump in approvals "indicates that underlying housing market activity is limited". |
| "Significantly, mortgage approvals are very low compared to long-term norms. June's level of 44,192 is only 51.1% of the average monthly level of 86,537 seen since 1993, while a level of 70,000-80,000 has in the past been considered consistent with stable house prices," he said. | "Significantly, mortgage approvals are very low compared to long-term norms. June's level of 44,192 is only 51.1% of the average monthly level of 86,537 seen since 1993, while a level of 70,000-80,000 has in the past been considered consistent with stable house prices," he said. |
| "Housing market activity is persistently low compared to long-term norms and while it may eventually be lifted by more mortgages being granted at decent interest rates under the 'Funding for Lending Scheme' to be launched by the Bank of England on 1 August, this is unlikely to be a major factor in the near term at least." | "Housing market activity is persistently low compared to long-term norms and while it may eventually be lifted by more mortgages being granted at decent interest rates under the 'Funding for Lending Scheme' to be launched by the Bank of England on 1 August, this is unlikely to be a major factor in the near term at least." |
| The fall in mortgage approvals may also reflect the lack of appetite for lending among some of the major banks. Santander has already reduced its lending targets and in recent days it announced plans to pull back further. | The fall in mortgage approvals may also reflect the lack of appetite for lending among some of the major banks. Santander has already reduced its lending targets and in recent days it announced plans to pull back further. |
| However, Lloyds Group has confirmed it is making £5bn available to first-time buyers in 2012, a move it says will help more than 50,000 people buy their first property. | However, Lloyds Group has confirmed it is making £5bn available to first-time buyers in 2012, a move it says will help more than 50,000 people buy their first property. |
| Figures from the Building Societies Association (BSA) show a jump of 38% in lending by mutuals in the first six months of 2012. | Figures from the Building Societies Association (BSA) show a jump of 38% in lending by mutuals in the first six months of 2012. |
| Gross mortgage lending by the sector was £14.1bn, compared to the £10.2bn in the same period of 2011. Lending rose 28% to £2.7bn in June 2012, up from £2.1bn in June 2011. | Gross mortgage lending by the sector was £14.1bn, compared to the £10.2bn in the same period of 2011. Lending rose 28% to £2.7bn in June 2012, up from £2.1bn in June 2011. |
| Savings at the societies was also up. The BSA said savings balances among members increased by £639m in June 2012, compared to a net withdrawal of £94m in June 2011. After interest credited was removed there was a net receipt of £378m. | Savings at the societies was also up. The BSA said savings balances among members increased by £639m in June 2012, compared to a net withdrawal of £94m in June 2011. After interest credited was removed there was a net receipt of £378m. |
| Paul Broadhead of the BSA, said: "The low interest rate environment continues to make it challenging for households to save, especially when wage growth has been subdued for quite some time. | Paul Broadhead of the BSA, said: "The low interest rate environment continues to make it challenging for households to save, especially when wage growth has been subdued for quite some time. |
| "At its July meeting, the [Bank of England's] monetary policy committee considered a reduction in the Bank rate. Such a cut would be a further blow to hard-hit savers and, with rates already so close to zero, we judge it would anyway have little impact on demand in the economy." | "At its July meeting, the [Bank of England's] monetary policy committee considered a reduction in the Bank rate. Such a cut would be a further blow to hard-hit savers and, with rates already so close to zero, we judge it would anyway have little impact on demand in the economy." |
| Top mortgages | Top mortgages |
| Chelsea Building Society | Chelsea Building Society |
| HSBC | HSBC |
| Nationwide | Nationwide |
| Provided by London & Country for the Guardian |