Individuals borrowed a net £2.7bn of mortgage debt in June, up from £1.3bn in May, according to the Bank of England’s latest Money and Credit Report. Net mortgage approvals for house purchases remained steady at 60,000 in June, while approvals for remortgaging dropped from 29,300 to 27,500 over the same period.
Net consumer credit borrowing dipped to £1.2bn in June, from £1.5bn in May. Private non-financial corporations (PNFCs) raised £6.7bn of finance in June, an increase from £4.2bn in May, driven by £4.0bn of net bond issuance and £3.6bn of loans by banks and building societies.
The net flow of sterling money (M4ex) amounted to £4.1bn in June, up from £3.4bn in May, largely driven by an £8.4bn increase in households’ holdings of money, including an additional £3.4bn deposited into ISAs. This growth was partially offset by decreased holdings of money by PNFCs and NIOFCs, by £1.8bn and £2.4bn respectively.
The flow of sterling net lending to private sector companies and households (M4Lex) increased to £3.7bn in June, from £0.3bn in May. This was driven by an increase in net lending to households to £2.3bn in June, from £1.7bn in May, and an increase in net lending to non-intermediate other financial corporations (NIOFCs), to £1.2bn in June from -£1.8bn in May. Lending to PNFCs decreased to £0.2bn from £0.5bn over the same period.
The annual growth rate for net mortgage lending rose to 0.5% in June, after a rise to 0.3% in May. Gross lending decreased to £20.8bn in June, from £22.6bn in May, while gross repayments decreased by £1.6bn to £18.7bn over the same period.
Nathan Emerson, CEO of Propertymark, commented: “Today’s figures show that the general election did not damage people’s confidence in borrowing money to purchase their next home in the way many may have anticipated. Momentum has sustained itself, however, now we have a newly elected government that is ambitious about building new homes, we hope that confidence increases further in the housing market. In addition, Propertymark is keen to see further confidence boosts with the Bank of England considering a cut in interest rates when they feel this is the right time to do so.”
Mark Hollands, head of sales & distribution at Bluestone Mortgages, added: “Today’s mortgage approvals indicate that consumer confidence remained steady. This combined with major lenders cutting rates in anticipation of a base rate reduction should see demand for property rise in the second half of the year. For those looking to move onto or up the property ladder in the current environment, speaking to a mortgage broker is a sensible first step. These professionals have a vital role to play in helping potential first-time buyers and home movers navigate the products available to suit their individual needs and help make their homeownership dream a reality.”
