Mortgage approvals creep up in July

Mortgage approvals increased slightly in July, up from June’s 15-year low, according to new figures published by the British Bankers Association (BBA).

There were 55,364 mortgage approvals in July, valued at £7.1 billion. This was up from 51,245 in June but remains well below the long-term average.

The figures revel that consumers are repaying existing debt faster than they are taking on new mortgage borrowing.

Mortgage approvals for house purchases increased to 28,441, up from 25,940 in June but down 17 per cent from July 2012.

Meanwhile, remortgage approvals also rose, up from 14,033 to 15,600, valued at £2.1 billion compared to £2 billion in June.

The BBA said: “Gross mortgage lending of £7.1bn in July was below the recent monthly average and reflected continued low levels of activity in the housing market.”

Ashley Brown, director of mortgage broker Moneysprite said: "July's mortgage approvals may have crept up since June, but the gravity is irresistible - the figure is 17% down on the same time last year, and net lending remains at negligible levels.

“The underlying reason is simple - debt aversion among consumers and a lack of appetite from lenders.”

The number of mortgage deals for first-time buyers and borrowers with small deposits has shrunk in the last six months and lenders have been tightening their borrowing criteria in 2012.

The Bank of England launched its £80 billion Funding for Lending Scheme last month but this has led to a number of excellent mortgage deals for those with high levels of equity but few cheaper products which are obtainable for those with a high loan-to-value (LTV) ratio.

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