May Bank of England mortgage approvals

Commenting on the Bank of England Mortgage Approvals data, Simon Rubinsohn, RICS chief economist said: "Bank of England data suggests that mortgage approvals for house purchases only rose modestly in May. At first glance, this appears slightly at odds with the BBA figures published last week but a more detailed examination of numbers helps to explain the apparent inconsistency. While mortgage approvals by banks actually rose by around 2,500, loans from building societies and other specialist lenders both fell during the month. The RICS 'New Buyer Enquiries' series which typically lead mortgage approvals by around three months suggests that despite the flatter picture in May, mortgage approvals will (on a seasonally adjusted basis) push up towards the 50,000 area over the course of the summer.

"Meanwhile, remortgaging activity hit a new low in May. This may reflect, in part, a degree of satisfaction with the low Standard Variable Rate mortgages that many homeowners have moved on to as existing products terminate. It could also capture the difficulty other borrowers, who have slipped into negative equity (or now require high LTVs) as a result of price house declines, are facing in finding a more attractive alternative offering."