The Bank of England has revealed that net borrowing of mortgage debt by individuals increased to £0.1 billion in June, after net repayments of £0.1 billion in May and record high net repayments of £1.1 billion in April.
Net mortgage approvals for house purchases saw an increase from 51,100 in May to 54,700 in June, while approvals for remortgaging rose from 34,100 to 39,100 during the same period.
The ‘effective’ interest rate – the actual interest rate paid – on newly drawn mortgages continued to exhibit sustained increases, having risen by a further 7 basis points, to 4.63% in June.
Net borrowing of consumer credit by individuals rose to £1.7 billion in June, the highest since April 2018.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Mortgage approvals ticked up again in June to the highest level seen since October although buyers remain concerned as to what’s going on in the wider economy and what they can afford.
“The average rate on new mortgages continued to rise in June, increasing by 7 basis points to 4.63%. The worst of the pain may not be over with the Bank of England poised to raise the base rate again later this week.
“Swap rates, which underpin the pricing of fixed-rate mortgages, and have been exceptionally volatile in recent weeks, have settled down since the encouraging dip in inflation. A number of lenders, including HSBC and Barclays, have reduced their fixed rates and borrowers will be hoping other lenders follow suit in coming days and weeks.”
Conor Murphy, CEO of Smartr365, added: “The sun continues to shine on the UK property market, with activity holding up in the face of the wider economic slowdown. The summer months are typically busier due to the weather improving property photography and making moving easier, while also allowing families to move between school terms. Besides the weather, activity is also buoyed by stabilising house price inflation, and competitive pricing from lenders.
“Widespread tech integration will be key to capitalising on this strong demand. Comprehensive, end-to-end systems, which can house a range of tech tools, are key to streamlining time-intensive admin tasks, giving advisers more time to make the most of this bright spell.”
