Mortgage lending doubled in June

Latest Bank of England data has shown that mortgage lending more than doubled from £3.3 billion in May to £7.7 billion in June. June’s figure was also substantially higher than the previous six-month average of £4.9 billion.

Mortgage approvals for house purchases increased to 58,200 in June, from 56,600 in May. However, this was below the previous six-month average of 61,400.

Approvals for remortgaging increased to 34,200 in June, from 33,800 in May, although these figures do not capture product transfers where borrowers take a new deal with their existing lender.

Separate data showed that net borrowing of consumer credit by individuals slightly increased to £1.8 billion in June, from £1.7 billion in May, and was in line with the previous 6-month average of £1.8 billion. Within this, net borrowing through credit cards was £0.9 billion in June, up from £0.6 billion in May. Net borrowing through other forms of consumer credit (such as car dealership finance and personal loans) decreased to £0.9 billion in June, from £1.1 billion in May.

Melanie Spencer, Growth Director at Target Group, said “An increase in both net mortgage borrowing and approvals shows there is still underlying demand in this market, despite a very challenging backdrop. While we know that lenders have increased pricing in recent weeks due to the rise in swap rates, there is equally potential buyers out there that have had enough of the crisis fatigue and want to kick on with plans. With no signs of an end to this conflict, lenders will continue to face a tug of war between prudent pricing and the need to meet their own lending targets and ambitions for market share.

“It’s yet another reminder that lenders are operating in a market where conditions can change rapidly. Operational agility is therefore just as critical as pricing itself, ensuring firms pair efficient, scalable and tech-enabled solutions with the right capabilities – either in-house through digital transformation or outsourced to the right partners. The ability to respond quickly to changing funding costs, borrower demand and market sentiment will be crucial to support intermediaries and build momentum in the months ahead.”