The Bank of England’s latest Money and Credit report, covering June, has revealed that there was a £1.9bn rise in mortgage borrowing last month.
This compares to the increase of £1.2bn in May.
Gross new borrowing was £15.8 billion in June, below the pre-Covid February level of £23.4 billion.
Meanwhile, the number of mortgage approvals for house purchase rose strongly, to 40,000, up from 9,300 in May. However, approvals were 46% below the February (pre-Covid) level of 73,700.
Approvals for remortgage have also increased, to 36,900; but they remain 30% lower than in February.
Kevin Roberts, director of Legal & General Mortgage Club, said: “Despite activity remaining below pre-Covid levels in June, the last few weeks have seen a boom in demand in the mortgage market Consumers who put their housing plans on hold during the lockdown are now pressing ahead, while the recent Stamp Duty holiday is also encouraging more hopeful buyers to move forward with new purchases. Our research has even shown that first-time buyers are potentially driving this boom, with 93% saying they still plan to buy a property this year.”
“However, there are still challenges facing borrowers up and down the ladder, and particularly those who have smaller deposits who need to access higher loan-to-value mortgages of 90% and above. While these buyers currently face a more limited choice of mortgage, lenders are eager to return to this area of the market once they are sure they can manage the high levels of demand from customers. In the meantime, buyers who are unsure of their options should speak with an independent mortgage adviser to find out what alternative solutions are available to them.”