UK mortgage approvals hit a five-month high in July, rebounding slightly after a slump in the first half of the year.
UK Finance figures released this morning hit 41,587 in July, having slowed over the previous five months to a nine-month low of 40,385, in June.
John Goodall, chief executive of buy-to-let specialist Landbay, put the rise down to the fact “mortgage rates are currently at record lows, and both first time buyers and existing homeowners are taking the opportunity to lock in a good fixed or variable rate while they still can”.
Howard Archer, chief economic adviser to the EY Item Club, pointed out that the figures were still down on 44,295 in January and “well below” the 1997 to 2017 monthly average of 52,261.
Meanwhile, annual growth in overall consumer credit was steady at two per cent and down at 5.3 per cent in credit card lending.
Archer suggested these figures will be a “significant relief” to the Bank of England, which has been vocal in its warnings over consumer debt in recent months.
The BoE sees the recent uptrend of consumer borrowing as a significant risk to the economy and has warned that banks risk become complacent in their lending behaviour.
The latest credit conditions survey did at least indicate that banks are becoming more cautious in their behaviour by making less unsecured credit available to consumers and tightening lending standards.
Elsewhere, the Federation of Small Businesses (FSB) was concerned that the figures showed a decline in small business borrowing to a 2.1 per cent annual growth.
FSB chairman Mike Cherry said: “These figures confirm that small business borrowing is down, corresponding to lower investment intentions and confidence levels.
“Only one in seven small firms are currently applying for external finance, with demand for bank loans falling significantly over the last year, although this is not driven by a switch to alternative lending.”
Read more: Nationwide scales back buy-to-let mortgages