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UK house purchase approvals fall to 18-month low

Staff Writer |
Mortgage approvals for house purchases in the UK fell to an 18-month low, according to the British Bankers Association (BBA).

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House purchase approvals were down 19% year-on-year to 37,622 in July, down 5.4% from the 39,763 in June, slightly below the consensus forecast of 38,000 and the lowest since January 2015.

Although approvals across the first seven months of the year are 2% higher than last year, economists said the slowing in July fuelled suspicions that house prices could ease back by several percentage points over the coming months.

Gross mortgage borrowing reached £12.6bn in July, the BBA calculated, which was 6% higher than the same month last year, while net mortgage borrowing was 3% higher year-on-year.

Almost all of the decisions to borrow would have been taken before the UK referendum on EU membership.

The growth in consumer credit continues reflected strong retail sales and low interest rates driving demand for personal loans and overdrafts.

Borrowing by non-financial companies increased by £2.3bn in July after a small fall in June, the BBA revealed.

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