Mortgage approvals hit two-year high while consumer credit growth remains stagnant
Mortgage approvals for July hit a two-year high according to official data released on Friday.
The Bank of England data revealed that lenders approved 67,306 mortgages last month, up from 66,506 in June.
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The housing market has endured a slowdown since the European referendum in 2016, particularly in London.
But in recent months there has been early signs of recovery with increasing approval rates and house price growth.
However, house prices did remain stagnant from July to August according to the Nationwide Housing Index
The Bank of England said net mortgage lending rose by £4.6bn in July, the largest increase since March 2016, while consumer lending increased by £897m, which was less than the forecast £1bn.
Annual consumer credit growth also remained stagnant from June to July at 5.5 per cent.
Howard Archer, chief economic advisor to the EY ITEM Club, said: “Net mortgage lending rose to £4.6bn, but with gross lending dropping between June and July, this rise reflected lower repayments.
“Although mortgage approvals for house purchase increased, the number remained within the very narrow range seen over the past two years.
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“With economic uncertainty elevated and sentiment depressed, a subdued appetite for borrowing among households seems likely to continue.
“That said, consumers’ spending power is being boosted by low inflation and pay growth running at a decade high. This leads us to think that consumer spending growth should remain a relative bright spot for the economy, and one more sustainable for not being built on rapid debt accumulation.”