Borrowers hold firm in June

Mortgage lending growth in June reached its highest level for three months, the Bank of England has reported in figures which contradict trends reported by other lenders thus far this month.

Last week the British Bankers' Association reported that growth in net lending by banks had fallen by almost £800 million in June, but the Bank of England today announced that lending rose by £9.6 billion last month – up from May's rise of £8.8 billion.

The number of loans approved for house purchase also remained strong, with the reported figure of 114,000 at odds with market expectations of a figure closer to 109,000.

However, Global Insight chief economist Howard Archer pointed out that the £9.6 billion figure was merely "broadly in line with the average over the previous six months".

"Significantly, the latest numbers point to a modest drop in the level of re-mortgage activity. This suggests that homeowners may just be becoming a little more wary of continuing to draw on the equity that has built up in their property as a means of financing spending at a time when real incomes growth remains under pressure," commented the Royal Institution of Chartered Surveyors' Simon Rubinsohn.


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