UK mortgage lending rises sharply

30 August 2006

The latest mortgage figures from the Bank of England have underlined the strength of the UK property market.

New figures show that the number of new mortgages approved – but not yet lent – rose again last month, to 120,000; that’s the highest level since the start of the year. Approvals have been rising steadily throughout 2006 and are up 24% on a year ago.

At the same time, the amount of money actually lent on new mortgages in July rose by £9.8 billion, which is the second-highest monthly increase on record.

Financial experts see mortgage approvals as a good indicator of future activity within the housing market. These new figures from the Bank of England suggest that the current buoyancy of the market has a long way to go – despite the small rise in interest rates earlier this month.

One economist – George Johns, of Barclays Capital, said: “With July’s mortgage approvals tally rising to the highest since the beginning of the year and mortgage lending posting the largest monthly gain for nearly three years, the message is clearly that housing market activity remains very firm indeed.”