Mortgage approvals increase for fourth consecutive month

The number of mortgages secured for house purchase increased 14% to 50,123 in July, marking the fourth consecutive increase since April, according to the Bank of England.

The number is also higher than the previous six-month average of 41,243. The value of the mortgages also increased, up 29% from £5.2bn in April to £6.7bn in July, according to the Bank's figures out today.

Meanwhile, the number of loans advanced for remortgage increased from 32,588 in April to 35,206 in July, with the value up from £4.0bn to £4.5bn in the same period, which is above the six-month averages of 33,008 and £4.1bn respectively.

Paul Samter, economist for the Council of Mortgage Lenders, says: “Activity still remains weak, but has improved from the historic low levels of turnover at the beginning of the year. We expect volatility in net lending levels over the rest of the year and there may be other months in which negative net lending occurs as the recovery is likely to be sporadic and shaky at first.

“Overall however, the figures are consistent with our view of a slowly improving house purchase market, yet still constrained by a lack of available funding and the fragile economic backdrop.”

The Bank of England's figures also reveal that total net lending to individuals fell by £0.6bn in July and consumer credit declined by a net £0.2bn. Credit card lending increased by a net £0.1bn while other loans and advances fell by £0.3bn.

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