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UK mortgage approvals fall to 15-month low in June: BBA

Tuesday, July 26, 2016 - 16:38
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British banks approved the fewest mortgages for house purchase since March 2015 last month and also cut lending to businesses, as nerves weighed in the run-up to June 23's referendum on European Union membership.

[LONDON] British banks approved the fewest mortgages for house purchase since March 2015 last month and also cut lending to businesses, as nerves weighed in the run-up to June 23's referendum on European Union membership.

The British Bankers' Association said it was too early to tell how demand for finance would hold up after the vote. "Business borrowing in June dropped for the first time in 2016, signalling that investment decisions were being delayed until after the vote," BBA chief economist Rebecca Harding said.

Net lending to non-financial businesses fell by 526 million pounds in June, the biggest fall since December last year.

"Overall, business confidence was clearly fragile in anticipation of the outcome of the vote, but these results are not a verdict on the health of the economy post-Brexit," she added.

The number of mortgages approved by British banks last month dropped to 40,103 from May's downwardly revised 41,842, the BBA said.

The value of net mortgage lending dropped to 1.399 billion pounds in June from 1.665 billion, though it was well above a low of 208 million pounds struck in April after a new tax was imposed on purchases of second homes and rental properties.

The BBA figures do not include lending by mutually owned building societies, which accounts for around a third of mortgages. The next release of the more comprehensive Bank of England lending data is due on Friday.

REUTERS