UK mortgage approvals fall to lowest level since January

UK mortgage approvals fell in September to their lowest level since January, dented by rising borrowing costs, according to figures released on Monday by the Bank of England.

Net mortgage approvals for house purchases declined to 43,300 from 45,400 in August. Economists were expecting 44,500.

Meanwhile, approvals for re-mortgaging fell from 25,100 in August to 20,600 - the lowest level since January 1999.

Net borrowing of mortgage debt by individuals dropped to £0.9bn in September from £1.1bn in August. This was the lowest level since April.

Andrew Wishart, senior property economist at Capital Economics, said the drop in mortgage approvals "reflects the second spike in the average advertised mortgage rate to 5.9% in July with the usual two-month lag".

"Given the drop back in mortgage rates since September probably marked the trough. Net mortgage lending also turned negative again as the slump in approvals in recent months fed through to lower mortgage advances (funds being distributed)," he added.