Mortgage lending values increase but approvals continue to slide

Mortgage lending increased by £4.1bn during June, but approvals for home purchase fell.

Figures from the Bank of England show net lending was £1.34bn, while approvals for home loans fell from 65,109 to 64,683 between May and June.

The figure is also 4,000 down on January.

The value of lending between May and June for home loans did increase from £11.7 to £11.8bn, but most growth was in remortgaging, where the values went from £7.4bn to £7.9bn and approvals rose from 43,145 to 44,548 over the month.

Commenting on the data, Jeremy Duncombe, director of the Legal & General Mortgage Club, said: “These results are indicative of how resilient the housing market is.

“However, what the figures do not show is that buyers are having to borrow larger sums of money as house prices continue to rise at a much higher rate than wage inflation.

“Put simply, house prices are making it extremely challenging for first-time buyers to become home owners.

“To add to this, people already on the ladder are finding themselves stuck in their current homes due to the lack of supply and the costs associated with moving.

“The Government needs to focus on building more housing across all types of tenure, as well as revisiting whether levies such as Stamp Duty are stopping people moving.”

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