Lending above average in June

The Bank of England has announced that the increase in total net lending to individuals was £10.4 billion in June – higher than both the increase in May and the previous six-month average.

June's 12-month growth rate in lending was 10.2 per cent, which was consistent with the level recorded in May, while the three-month annualised growth rate fell by 0.1 percentage points to 9.2 per cent.

Net lending secured on dwellings increased by £9.6 billion in the sixth month of 2007, which was above the growth in May and the previous six-month average.

A total of 114,000 loans were approved for house purchase in June, with a further 102,000 going out for remortgage and 72,000 for other purposes.

Simon Rubinsohn, chief economist with the Royal Institution of Chartered Surveyors, commented: "The volume of mortgage approvals may have proved more resilient than expected in June but as recent interest rate increases get fully passed through into borrowing costs, we expect to see more evidence of a cooling in demand for property.

"Significantly, the latest numbers point to a modest drop in the level of remortgage activity."

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