The Bank of England has revealed that the number of loan approvals for house purchase was 68,764 in July, compared to the average of 64,186 over the previous six months.
During July, the number of approvals for remortgaging was 38,042, compared to the average of 34,549 over the previous six months.
The number of approvals for other purposes was 10,855, compared to the average of 10,076 over the previous six months.
Charles Haresnape, chairman of the Intermediary Mortgage Lenders Association (IMLA), said: “While May was a weak month for mortgage approvals, it’s promising to see the post-election rebound continue into July, which saw the highest number of approvals since the introduction of the Mortgage Market Review (MMR) last year. With 7% more approvals compared with the six-month average, it is a clear indication that health is returning to a market that has been under significantly pressure to perform while adjusting to new working practices.
“However, with the additional layer of the European Mortgage Credit Directive (MCD) rules begins to come into effect this month, there is likely to be an extra element of uncertainty and instability ahead for the market. Even in the face of China’s rattling stock market, it may also be premature to rule out a base rate rise in the near future, which is likely to weigh down on consumer borrowing as well.
“With more regulation on the way and a potential rise in the cost of borrowing on the cards, the six month window to implement the MCD rules will be a challenge for all concerned. On the positive side, rising approvals suggest consumer appetite is strong and lenders will also be striving to meet their end of year targets, which should support some competitive deals. We must hope that the impacts of change do not weigh down too heavily on what otherwise looks like a strengthening market recovery.”
