Mortgage lending at highest level since ’08, as house prices rise

Mortgage approvals were at their highest level for five years in July, figures from the Bank of England have shown.

The Bank’s report that gross lending rose by around 12 per cent in July to £16.7 billion, has been welcomed by the Council of Mortgage Lenders.

It was found that purchase lending rose 11 per cent from £9.7 billion in June to £10.8 billion in July, while remortgaging rose 16 per cent from June to July to £4.9 billion.

Total mortgage lending transactions rose nearly 13 per cent, from around 108,600 in June to 122,300 in July.

CML chief economist Bob Pannell notes: “A monthly increase of over £1 billion in house purchase lending reinforces the picture of a housing market that is firmly in recovery mode. However, as the Governor of the Bank of England remarked just two days ago, lending levels remain well below their pre-crisis levels.

“On the remortgage side, it is only really since the start of this year that we have begun to see even any gentle recovery from historically low levels.”

Meanwhile, the latest figures from Nationwide have found that British house prices rose for the fourth consecutive month, increasing by 0.6 per cent after a 0.9 per cent rise in July.

The annual rate slowed to 3.5 percent from 3.9 percent.