Robust new mortgage approval figures show appetite stays strong

New mortgage approvals stayed strong through July in spite of a chain of five interest rate hikes over the last year which have brought the base rate to 5.75 per cent, the Bank of England has reported.

The total number of new mortgages approved for homebuyers in July was on a par with the number approved in June, at 115,000, in spite of forecasts projecting that approvals would fall to 110,000.

Meanwhile, the growth in gross mortgage lending levelled off slightly over the month with a gain of £9.19 billion in July compared to £9.34 billion in June.

But a "correction" in the mortgage market demonstrating that appetites to borrow and buy are becoming more subdued is now "long overdue", commented Alan Clarke, economist at BNP Paribas.

Meanwhile, the Nationwide Building Society reported that the average price of a home gained 0.6 per cent during August, showing that growth had picked up compared to a gain of just 0.1 per cent in July.

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