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June mortgage borrowing jumps by 4% – BBA

by: Fiona Nicolson
  • 26/07/2016
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June mortgage borrowing jumps by 4% – BBA
Gross mortgage borrowing rose to £12.2bn in June, according to the British Banker’s Association’s (BBA’s) statistics, up by 4% against June 2015 figures.

Borrowing in the first half of 2016 also increased to £79.9bn, compared with £63.6bn in the same period last year.

House purchase approval numbers were 11% lower than in June 2015, but in the first half of this year, the figures were 5.5% higher than in the same period of 2015.

The BBA also reported  that consumer credit continues to increase, showing annual growth of over 6%.

Dr. Rebecca Harding, chief economist at the BBA said: “This month’s high street banking data reflects the uncertainty that was felt ahead of the EU referendum.

“Business borrowing in June dropped for the first time in 2016, signalling that investment decisions were being delayed until after the vote.

“Mortgage lending and approvals also fell back in June, but remain above the low levels seen in April following the introduction of the stamp duty surcharge.

“Overall, business confidence was clearly fragile in anticipation of the outcome of the vote, but these results are not a verdict on the health of the economy post-Brexit.  We won’t start to see that data come through until the autumn and any trends before then should not be over-interpreted.”

Jonathan Harris, director of mortgage broker Anderson Harris, agreed that June’s lending figures are too close to the vote to be truly conclusive, but said they already indicate a weaker mortgage lending outlook.

“However, gross and net mortgage borrowing were still both higher than a year ago.  Approval numbers also picked up from April, where numbers were lower following a surge in the first quarter, as landlords brought forward buying decisions.

He added: “Remortgaging is on the rise, a trend we expect to see continue over coming months.  This is not so much because borrowers fear a rate rise – on the contrary it looks as though the next move in base rate will be downwards – but because fixed rates in particular are just so cheap.”

 

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