Net mortgage borrowing rises to £6.1bn in August: BoE

Net mortgage borrowing rose in August to £6.1bn from £5.1bn in July, according to the latest figures from the Bank of England (BoE).

Data shows net mortgage borrowing is still above the pre-pandemic average of £4.3bn in the year to February 2020.

Gross lending was little changed last month at £25.4bn, from £26bn in July.

Mortgage approvals for home purchases rose sharply from 63,700 in July to 74,300 in August.

This is the highest level since January this year, when it hit 74,500, as well as a notable increase after trending lower in previous months.

Mortgage approvals continued to rise in August to 49,400 from 48,400 in July. This figure is close to the pre-pandemic average of 49,500 in the year to February 2020.

Emma Hollingworth, Director of Distribution at MPowered Mortgages, said: “Despite the rising cost of living and mortgage rates, it is positive to see a slight increase in mortgage approvals. While we know there are headwinds ahead, it is positive to see the government announce its intention to reduce stamp duty in a bid to further stimulate the housing market.

“However, with interest rates set to continue to rise over the next six months, those looking for suitable and affordable mortgages will need a quick and certain answer as to what mortgages are available to them.”

MT Finance Director Tomer Aboody adds: “What looks like a final offer from buyers to take advantage of rates before they rise has increased the number of home purchases as mortgage approvals rise.”

“Effective interest rates of around 2%, which in today’s environment look like free money, show why buyers were keen to secure their purchases.”

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