Mortgage approvals slumped to their lowest level in 14 months in September as activity in the home loans market continued to cool.
Approvals fell to 61,267 in the month, down from 64,054 in August and hitting the lowest level since July last year, according to the Bank of England. Monthly approvals are 20% below their January peak.
The figures were weaker than the City had been expected and pushed sterling down a tenth of a cent against the dollar to $1.6122 in morning trade.
The continued mortgage market slowdown makes it less likely the Bank will raise interest rates from their 0.5% floor before the middle of next year.
The deputy governor, Sir Jon Cunliffe, last night became the latest senior Threadneedle Street voice to argue rates can stay lower “for a longer period than previously thought”.
The slowdown in mortgage approvals by commercial banks reflects the regulatory tightening of loan procedures known as the Mortgage Market Review that was introduced in April.
Net mortgage lending, which lags approvals, also fell in September, declining to £1.8 billion, down from £2.2 billion in August.
Business lending dropped again in September with outstanding loans to firms down by £700 million in the month and 3.1% lower than a year earlier.
The squeeze on small businesses continued with net lending down £200 million. Consumer credit, which excludes home loans, edged up by £915 million.
