New Bank of England figures have shown that mortgage approvals were down 1.6 percent from the previous month.
The new statistics said on Thursday that the number of approvals of mortgages for house purchases fell to 66,837, the lowest level since September 2016.
“With HSBC launching the cheapest five-year fix on the market at 1.69% and Yorkshire Building Society introducing a record low two-year discounted rate at 0.89%, the market is more competitive than ever.” said Mark Harris, chief executive of mortgage broker SPF Private Clients.
“It is a good time for borrowers, with lenders keen to attract business from first-time buyers, home movers and those remortgaging. However, affordability criteria remain tight,” he added.
There has been an 11 percent rise in overdrafts and loans in the past 12 months. This increase in borrowing has led to declarations of “vigilance” by the Bank of England and different financial regulators.
Director of External Affairs at the Money Advice Trust, a charity that runs the National Debtline, Jane Tully, said: “While most people will cope with this borrowing for the moment, if the economy does worsen over the coming months there is a significant risk that many who have taken on this extra commitment could start to struggle.”
A report released earlier this week by insurer Legal & General revealed that the “Bank of Mum and Dad” is the 10th biggest UK mortgage lender in the UK and buyers are increasingly relying on financial support from parents.
“We suspect markedly weakening consumer fundamentals, likely mounting caution over making major spending decisions, and elevated house price to earnings ratios will weigh down further on housing market activity and house prices over the coming months,” said Howard Archer, IHS Markit chief UK and European economist.
On top of this, Britons are saving less now than they have done in the past eight years.