UK mortgage applications hit five month high

Approvals for house purchases have hit a five-month high in June as the Uk housing market starts to recover from a weak start to the year according to figures by the bank of England on Monday.

In June 65,519 Mortgages were approved which is the highest level since January 2018 and up from 64,684 in May.

These figures are one of the last economic indicators published before the Bank of England’s monetary policy committee (MPC) meets on Thursday. The MPC is expected to raise interest rates by 0.25 percentage points at the meeting.

The recovery in mortgage lending during 2018 have previously been driven by remortgaging rather than house purchase prices, but in June we saw that change with the approval for remortgages falling from 51,669 to 47,895.

Looking at these two figures together the amount of mortgage approvals in June fell slightly from 129,753 to 128,118 even though house purchase approvals rose, this is down to the fact that remortgages went down slightly.

Looking at other lending. Consumer credit growth continued at the same rate as the previous month. The amount borrowed on credit cards rose by £600m and other loans increased by £1bn this means that lending has increased by 8.8% in the last year.

Members of the MPC have pointed to the consumers readiness to borrow as a justification for an increase to interest rates.

Thursday should bring further information.

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