Net mortgage approvals for house purchases rise to highest since September 2022

Net mortgage approvals for house purchases rose to 62,000 in July 2024, the highest since September 2022, when they stood at 65,100, and up from 60,600 in June, the Bank of England said in its Money and Credit release published on 30 August 2024¹. Approvals for remortgaging with a different lender fell to 25,100 in July, from 27,300 in June, continuing a downward trend seen since March 2024¹.

Individuals borrowed, on net, £2.8 billion of mortgage debt in July, the highest since November 2022 (£3.3 billion) and up from £2.6 billion in June¹. The annual growth rate for net mortgage lending rose to 0.6% in July, following a rise to 0.5% in June¹. Gross lending decreased to £19.6 billion in July, from £20.5 billion in June, while gross repayments decreased by £0.9 billion over the same period, to £17.4 billion¹.

The effective interest rate, the actual interest paid, on newly drawn mortgages was broadly unchanged at 4.81% in July, while the rate on the outstanding stock of mortgages rose by 4 basis points to 3.69%, from 3.65% in June¹.

Consumer credit told a different story. Net consumer credit borrowing rose to £1.2 billion in July, from £0.9 billion in June¹. Within that, net borrowing through credit cards was stable at £0.5 billion, while net borrowing through other forms of consumer credit, such as car dealership finance and personal loans, increased to £0.7 billion, from £0.4 billion in June¹. The annual growth rate for all consumer credit was little changed at 7.8% in July¹.

Effective interest rates on borrowing rose across several categories in July¹:

Household deposits with banks and building societies rose by £5.7 billion in July, driven by £3.8 billion deposited into ISAs and £3.3 billion into interest-bearing sight accounts, while households withdrew £0.5 billion from interest-bearing time accounts and £1.4 billion from non-interest bearing sight accounts¹. The effective interest rate paid on individuals' new time deposits decreased slightly by 2 basis points, to 4.42% in July¹.

Why it matters for households

Mortgage approvals are an indicator of future borrowing, so the July figure points to more house purchase lending completing in the months that follow¹. The remortgaging figure covers only switches to a different lender, so it does not capture borrowers moving onto a new deal with their existing lender¹. For households already holding a mortgage, the rate on the outstanding stock rose to 3.69% in July, meaning the average rate paid across all mortgage balances edged up¹. On the borrowing side, the effective rate on interest-bearing credit cards rose to 21.61% and on new personal loans to 9.14%, so the cost of new unsecured borrowing was higher in July than in June¹. Savers saw the rate on new time deposits slip slightly to 4.42%, while the rate on the outstanding stock of time deposits was little changed at 3.97%¹.

What happens next

The Bank of England's next Money and Credit release is due on 30 September 2024¹.