Mortgage approvals and household credit growth both slowed last month, adding to growing signs that prospective purchasers in the UK are starting to be deterred by the prospect of buying property, amid increasing inflation and political uncertainty caused mainly by the recent general election and Brexit.
The latest data from the British Bankers Association (BBA) reveals that the annual growth in consumer spending slowed to 5.1% in the month, down from the 6.4% rate recorded in April. It was the weakest growth rate since October 2015.
The number of new mortgages recorded by the BBA was 40,347, down from 40,686 in April and the lowest figure since last September last year.
Nick Harrison, head of products first direct, said: ‘’Increasing house prices and limited housing stock are having an effect on demand for house purchases, but we’re expecting to see strengthening demand for the security of fixed rates in the second half of the year due to the ongoing uncertainty over the economic outlook.”