Mortgage levels fall but equity release remains stable

Demand for mortgages appears to be in decline, with the number of approvals falling for the third consecutive month. However, the equity release and remortgage segments appear to be holding their own.

The number of approved mortgages fell to a yearly low of 31,767 in August, down from 34,219 in July, according to new figures from the British Bankers’ (BBA) Association. Gross mortgage lending totalled £8.1 billion, down compared with July, the previous six-month average and the comparable total a year ago.

Despite this, remortgaging activity has been slightly stronger, while equity release levels remained stable compared with July and with the previous six-month average. The average remortgage approval was worth £132,700 in August, while the equity release average was £25,400.

David Dooks, BBA statistics director, said: “Demand for mortgages continues to be weak despite more properties reportedly coming on to the market.

“Even with stable or falling house prices, the current economic climate makes it unlikely that demand will pick up in the near future.”