John Eastgate, the sales and marketing director of OneSavings Bank, says he is impressed with the recovery of mortgage approvals from last month’s lows despite the continuing economic uncertainty.
Mr Eastgate was speaking as it was revealed that mortgage approvals rose by almost 5 per cent in July, according to new, seasonally adjusted data from the Bank of England.
The report showed that the number of approvals for the month was at 129,950, which is up from 123,950 during the previous month. The date also showed that loans for house purchase rose from 65,318 to 68,689, while remortgaging approvals were up from 44,838 to 46,231. When it comes to a non-seasonally adjusted basis the total number of mortgage approvals actually dropped from 140,017 to 134,711. The seasonally adjusted rise comes amid ongoing pressures on affordability for homebuyers due to declining real wage growth.
The release of the data comes after news of an ongoing drop in house price growth, which is down to an annual rate of 2.1 per cent, according to Nationwide.
And although Mr Eastgate has explained that he is impressed with the figures, he has also take time to add a cautionary note regarding the current state of confidence among the UK's consumers.
He says he believes this will remain in what he describes as a "fragile" state given the numbers concerning the levels of purchase activity.
Mr Eastgate, who saw buy-to-let lender OneSavings Bank increase profits in the first half of the year with underlying pre-tax profits increased by 20% to £78.4 million, said: “Mortgage approvals have recovered from last month’s lows and they have done so despite persistent economic uncertainty.
"This is in itself impressive given the combination of inflation and low wage growth, although the low levels of purchase activity should be seen as an indicator of still fragile consumer confidence.
“Approval levels are being supported by remortgage activity, which continues to surge as minimal upward pressure on interest rates encourages borrowers to take advantage of record low mortgage rates. We really do expect this activity to continue growing through October and November before evening out sometime toward the end of the year.”
Meanwhile, the data also showed that lending to small and medium-sized firms dropped by £200 million in July.
And borrowing for private non-financial corporations recorded its biggest rise for three years at £8.9 billion for the period, it was revealed, also.