UK mortgage approvals hit 22-month high as lending rises

Approvals and borrowing for mortgages in the UK rose to their highest levels in nearly two years in July, according to data from the Bank of England on Friday.

Net borrowing of mortgage debt by individuals increased to £2.8bn last month, the highest since November 2022, and up from £2.6bn in June.

Meanwhile, net mortgage approvals for house purchases, a closely watched indicator of future borrowing, jumped to 62,000 from 60,600 the month before, marking the highest level since September 2022.

The increases came despite interest rates remaining broadly stable over the month, at 4.81% on newly drawn mortgages, with July being the final month before the Bank of England eased monetary policy.

On 1 August, the central bank reduced the Bank Rate from 5.25% to 5.0%, marking the first reduction in rates since March 2020.

In other news, net consumer credit borrowing also increased in July, rising to £1.2bn from £0.9bn in June, while household deposits with banks and building societies rose by a net £5.7bn.