UK mortgage approvals and lending drop in July

Mortgage approvals and consumer lending both declined in July as elevated interest rates and the rising cost of living continue to wreak havoc with personal finances.

Net mortgage approvals (meaning, approvals minus cancellations) fell to 49,400 last month, from 54,600 in June, the Bank of England reported on Wednesday in its monthly Money and Credit report. The figure was broadly in line with economists' expectations.

Approvals for remortgaging, however, edged higher – from 39,100 to 39,300. These figures only include those homeowners who remortgaged with a different lender.

For the month, the average interest rate paid on newly drawn mortgages rose a further 3 basis points to 4.66% – double the 2.33% rate paid in July 2022.

Meanwhile, the BoE also announced that net borrowing of consumer credit by individual declined to £1.2bn in July after reaching a five-year high of £1.6bn in June. The central bank said the drop was a result of falls in other forms of consumer credit like car dealership finance and personal loans, while credit card borrowing was broadly stable.