Mortgage lending declines in August

Gross mortgage lending dropped 1.2% to £24.1bn from a year earlier and mortgage approvals for buying a property fell 4.3% to 42,851, trade body UK Finance said.

Total mortgage approvals by high street banks rose 0.7% as a 9.2% increase in remortgage activity more than offset the decline in house purchase loans.

The figures underline established trends in the mortgage market amid a severe slowdown in house sales and as borrowers seek cheaper loans with rates near rock bottom. The slowdown is most acute in London and the South East of England, where some commentators fear a crash if the UK leaves the EU with no deal.

Credit card spending was 7.6% higher than a year earlier and outstanding levels of credit card borrowing rose 5.8% - the strongest rate since February as shoppers spent during the heatwave.

Peter Tyler, a director at UK Finance, said: “Remortgaging continued to dominate in August as homeowners took advantage of a competitive market to lock into attractive deals.

“Growth in card spending remained fairly strong, reflecting the boost to retail sales from the warm weather as well as the growing use of credit cards as a preferred means of payment.”

Tyler said the overall economic outlook was mixed as rising inflation continued to squeeze household incomes.