UK mortgage lending accelerated in July, a latest sign of a post-lockdown bounce-back in the housing market, and consumers returned to borrowing, data from the Bank of England showed today.
Mortgage approvals jumped to 66,300 from just under 40,000 in June and seven times higher than their coronavirus pandemic low of barely more than 9,000 in May, the data showed.
Economists polled by Reuters had expected about 55,000 approvals in July.
“Overall, these figures support other evidence that the economy continued to recover in July,” Andrew Wishart, an economist with Capital Economics, said.
“But we still think that the realisation of more job losses after the furlough scheme started to be wound up in August will cause the recovery to slow.”
Finance minister Rishi Sunak cut a duty on house purchase for many buyers in July as part of his emergency measures to spark the housing market and the broader economy which shrank by a record 20.4 per cent in the April-June period.
However, the approvals figure remained below its level of nearly 74,000 in February.
Similarly, the amount of mortgage lending in July rose by a net £2.7bn, up from £2.4bn in June but still a long way below an average of £4.2bn in the six months before the lockdown.
Consumer borrowing picked up, increasing by £1.2bn in July after four months of net repayments, slightly above the average borrowing before the lockdown.
But lending on credit cards remained down about 10 per cent from a year earlier.
Data published last month showed London house prices continued to fall in July, despite an increase in demand from new buyers.
Almost half of respondents to the Royal Institution of Chartered Surveyors (RICS) survey said they saw an increase in new buyers returning to the London housing market in July, up from minus 20 per cent in May and 43 per cent in June — marking the second consecutive report in which demand has rebounded.
Despite the capital experiencing a flurry in sales activity, RICS said London house prices remain negative — the only region across the UK to still experience prices falling.