British mortgage lending fell in July to the lowest amount since January 2014 after stricter criteria were introduced in April and June, the British Bankers’ Association (BBA) has revealed.
The BBA said 42,792 home loans were approved in July, 388 fewer than June and 4,208 fewer than the Jan-Mar period average of just below 47,000 per month.
British banks were obliged to introduce harsher affordability assessments on borrowers in late April as a result of the Financial Conduct Authority’s Mortgage Market Review.
In June, the Bank of England introduced narrower borrowing limits for the majority of the British public.
A BBA statement said: "Mortgage approval processes have now settled after the introduction of the Mortgage Market Review, to a typical level of around 40,000 mortgages approved a month for house purchase."
In June, Richard Woolhouse, chief economist at the BBA, said mortgage approval figures had fallen four months in a row up until end May 2014.
"Our figures indicate that the heat appears to be coming out of the housing market," he said.
Woolhouse added that the decline in figures was "significant" in light of the Mortgage Market Review.
Overall, mortgage approvals are around 12% higher, year-on-year, though building society mortgage approvals are not included in the BBA data.
According to the Building Societies Association (BSA), British building societies approved 187,400 mortgages in the period Jan-Jun 2014, representing a 29% market share.
Bank of England data for all British mortgage lending in July is due in September 2014.