Bank of England figures point to growing buyer confidence despite persistent affordability pressures
Net mortgage approvals for house purchases rose to 58,200 in June, up from 56,600 in May, according to the Bank of England's latest Money and Credit report.
Approvals for remortgaging with a different lender also edged higher, reaching 34,200 from 33,800 in May.
Net mortgage borrowing by individuals more than doubled to £7.7 billion in June from £3.3 billion in May, exceeding the previous six-month average of £4.9 billion. The annual growth rate for net mortgage lending ticked up slightly to 3.6% from 3.5%.
Secured gross lending rose marginally to £27.4 billion, above the six-month average of £26 billion, while repayments fell to £21.3 billion from £22.7 billion. The effective rate on newly drawn mortgages increased to 4.35% in June from 4.22% in May, while the rate on the outstanding stock of mortgages rose to 3.96% from 3.92%.
The Bank of England's latest Money and Credit data was echoed by Mortgage Advice Bureau's internal figures, according to Rachel Geddes (pictured right), strategic lender relationship director at the mortgage specialist network.
"Whatever the Bank decides tomorrow, it pays to know your options rather than wait and see - that's true whether you're buying or due to remortgage," she said. "One month's data is a snapshot, not the whole picture, which is why a mortgage adviser weighing up the market on your behalf matters more than any single number."
For Nathan Emerson (pictured right), chief executive of industry body Propertymark, approvals rising suggested buyers had responded to a period of relative economic stability, but cautioned that headwinds remained.
"Inflation is still above the Bank of England's 2% target ahead of this Thursday's interest rate decision, while higher household costs, including increased energy prices from 1 July, continue to place pressure on household finances," he said.
"Ongoing uncertainty in the Middle East also has the potential to affect global energy markets and inflationary pressures, meaning affordability will remain a key challenge for many aspiring homeowners."
"On the ground, mortgage rates have risen back to the same level seen a month ago amid renewed tensions in the Middle East," added Mark Harris (pictured right), chief executive of mortgage broker SPF Private Clients.
"Borrowers who will need a mortgage in coming months may want to consider securing a product sooner rather than later in case rates rise further in the short term."
Want to be regularly updated with mortgage news and features? Get exclusive interviews, breaking news, and industry events in your inbox – subscribe to our FREE daily newsletter. You can also follow us on Facebook, X (formerly Twitter), and LinkedIn.
