Latest statistics from the Bank of England Money and Credit show that individuals borrowed, on net, £2.7 billion of mortgage debt in June, up from £1.3 billion in May.
Net mortgage approvals for house purchases remained broadly stable at 60,000 in June, while approvals for remortgaging decreased from 29,300 to 27,500 over the same period.
Net consumer credit borrowing dipped slightly in June to £1.2 billion, from £1.5 billion in May.
Mark Hollands, head of sales & distribution, Bluestone Mortgages, said: “Today’s mortgage approvals indicate that consumer confidence remained steady. This combined with major lenders cutting rates in anticipation of a base rate reduction should see demand for property rise in the second half of the year.
“For those looking to move onto or up the property ladder in the current environment, speaking to a mortgage broker is a sensible first step. These professionals have a vital role to play in helping potential first-time buyers and home movers navigate the products available to suit their individual needs and help make their homeownership dream a reality.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, added: “Mortgage approvals for new purchases held steady, while remortgage approvals dipped although the latter may be down to borrowers sticking with their existing lender rather than going through the longer process of remortgaging to another provider.
“The effective interest rate paid on new mortgages rose again by three basis points to 4.82% in June. This comes as no surprise although we have seen in recent days that lenders have reduced mortgage rates, particularly for new borrowers. Those coming up to remortgage will hope some better rates will be available for those remortgaging going forward, resulting in less of a payment shock.
“With inflation sticking at its 2% target, an interest rate cut is increasingly likely, with some expecting it to come on Thursday. When it does happen, it will give the market a welcome boost and lenders more confidence to price their mortgage rates lower. It may even result in an uptick in mortgage approvals in coming months, particularly if successive rate reductions are forthcoming.”
