Mortgage approvals increase in July

The July figures from the British Bankers’ Association (BBA) show increases in the number of mortgage approvals and the amount of new lending, though this was below seasonal expectations.

Offsetting repayments gave rise to a net mortgage lending figure which was the lowest since October 2000. Unsecured lending has continued to be weak and the trend in deposit levels appears to be improving.

BBA statistics director, David Dooks, said of the latest data: "The numbers of mortgages approved for house purchase each month by the high street banks have continued to recover from last November's low point, but new lending is largely being offset by repayments, so that net rises remain relatively weak. Unsecured borrowing is subdued, with households focused on managing their personal finances and building up deposits.

"Lending to non-financial companies has contracted over the last year, as would be expected given both the recession and large corporates using the capital markets to raise funds, but amounts outstanding are only 3% lower than a year ago."