Figures released by the British Bankers' Association (BBA) for July indicate that gross mortgage lending of £21.3bn was 12% higher than last year. With annual house price inflation below this rate, the increase in lending reflects higher levels of re-mortgaging activity in the month.
Underlying net mortgage lending (gross lending minus repayments and redemptions) rose by £5.7bn. Although this was higher than June's increase and the recent average (both £5.4bn), annual growth remained at around 14%.
There were 182,950 mortgages approved (for all purposes) in July with an aggregate value of £21.5bn. The average loan approved for house purchase was £156,900, some 13% higher than a year earlier.
David Dooks, BBA director of statistics, said: "With customers seeking to replace deals or fix their mortgage costs, increased remortgaging activity boosted the banks' lending in July. Lower approvals volumes simply reflected the seasonal pattern, so we expect the stable trend in the banks' lending to continue over the next couple of months. Spending on credit cards was 8% higher than in July last year, but because cardholders are at least matching their spending with repayments, card borrowing continued to decline."
When compared to July 2006, mortgage approvals for house purchase were down 1% by number but up 12% by value; remortgaging approvals were up 12% by number and up 26% by value; while approvals for equity withdrawal were down 2% by number and up 10% by value.
