Mortgage loan amounts rise

Posted: 28 Aug 2007 12:05:14 GMT

Mortgage lending figures from July show that there was a significant year-on-year increase.

Mortgage lending figures from July show that there was a significant year-on-year increase.

The British Bankers' Association (BBA) has revealed that gross mortgage lending reached £21.3 billion in the month.

That signals an increase of 12 per cent year-on-year and is above annual house price inflation, hinting that there was a great deal of remortgaging activity.

A total of 182,950 mortgages were approved for all purposes in July, putting the average loan amount at around £156,900.

The number of approvals actually fell by one per cent year-on-year but the average loan amount increased by 13 per cent.

"With customers seeking to replace deals or fix their mortgage costs, increased remortgaging activity boosted the banks' lending in July," commented David Dooks from the BBA.

"Lower approvals volumes simply reflected the seasonal pattern, so we expect the stable trend in the banks' lending to continue over the next couple of months."

The Royal Institution of Chartered Surveyors has commented that it expects the decline in home loans to help reduce inflation further and prevent the Bank of England from increasing the base rate again any time soon.

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