Net mortgage borrowings fall in July; remortgage peaks: BoE

There was a slight decline in net mortgage borrowing in July, according to Bank of England (BoE) figures, from £5.3bn in June to £5.1bn the following month.

However, this remains above the pre-pandemic average of £4.3bn for the year to February 2020, and data also shows gross lending increased in the month to July 2022, from £24.6 billion to £26.1 billion.

The BoE says the number of home purchases rose in July from 63,200 to 63,800, and from £14.8bn in value to £15.3bn.

And mortgage approvals soared from 43,300 to 48,400 – a change in value from £14.8bn to £15.3bn.

Mark Harris, managing director of SPF Private Clients, comments: “The rate paid on new mortgages rose 18 basis points to 2.33% in July, the highest since June 2016, although the pace of the repricing seems to have slowed down. It’s no surprise that the number of remortgaged borrowers has increased as homeowners try to get a rate before they get even more expensive.

“Lenders have money to lend and remain keen to lend it, although volume management is the name of the game. The market was a little calmer in July, a trend that has been repeated since August. , and it will be interesting to see how September plays out.”

Meanwhile, chief executive Paul McGerrigan said: “A growing trend is seeing borrowers breaking short-term fixed rate agreements, paying ERCs to fix a rate now for a longer period. , to give them certainty in their budgeting.

“While this may be good for some borrowers, it will not be suitable for all. This is an exceptionally difficult time for people to make key financial decisions and they have to make tough decisions.”

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