The number of mortgages given out in the UK fell to its lowest level in more than 18 months in July as the economic impact of the country’s decision to leave the European Union began to hit the consumer lending market.
According to the latest figures released by the Bank of England as part of its July Money and Credit surveys, the total number of new mortgages given out in July was 60,912, down more than 3,000 from May, when 64,152 mortgages were approved.
Not only did July’s reading mark a substantial fall from the previous reading, but it was also well below the 61,900 approvals that had been forecast by economists in the lead up to the release. July’s reading is also an 18-month low, dropping to a level not seen since January 2015.
Here is the BoE’s chart showing July’s substantial drop:
The British property industry is widely expected to be one of the worst hit sectors in the wake of the referendum decision, with housebuilding stocks falling sharply, and predictions about a big fall in UK house prices widespread. Last week, for example, estate agent group Countrywide warned that property prices across the country will fall by 1% in 2017 as a result of Brexit.
As Business Insider’s Lianna Brinded pointed out at the time: A 1% drop may not seem like a big deal, but considering house prices have continually increased for the past few years, a sudden switch to a negative reading is alarming. It is completely turning the house price trajectory upside down.”
It should be noted that the data released on Tuesday was compiled prior to the Bank of England’s interest rate cut and the announcement of new measures designed to ensure that banks continue lending to the British public despite the expected downturn in the British economy in the aftermath of referendum.