LONDON (SHARECAST) - Mortgage approvals fell more than expected in June and lending was also weaker than forecast, latest the Bank of England revealed today.
Net mortgage by lending by building societies also fell, but other indicators suggests loan activity at the mutuals is reviving a little.
Loans approved for house purchase, the Bank of England’s official definition, fell to 47,643 in June, from 49,461 in May and well below the average for the past six months of 50,036.
Net mortgage lending growth eased to £665m in June from £838m in May, against forecasts for £1bn.
Building societies mortgage lending also fell on a net basis in June, by £436m, though this was a slower rate than the previous month’s £661m decline.
Gross lending by the societies picked up again. Loans advanced rose to £1.8bn from £1.5bn. Approvals also picked up to £1.74bn from £1.56bn.
"Activity in the mortgage market has picked up compared to the start of the year, and the rising number of approvals is a positive indicator for coming months.
However, the forthcoming public sector cuts may add to the economic uncertainty which could constrain any significant growth in mortgage lending in coming months," said Adrian Coles, Director General of the BSA.
Consumer credit fell by £0.1bn in June, the Bank of England added, below the previous six-month average of an increase of £0.2bn and the May increase of £0.3bn.
Credit card lending increased by £0.1bn, slightly below the previous six month average of £0.2bn.
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