According to Bank of England report, households repaid £86 million of consumer credit in June
Mortgage lending bounced back last month after hitting a record low in May, as the UK’s economy started to reopen following the coronavirus pandemic.
Bank of England figures show mortgage approvals increased to 40,010 in June from 9,300 the previous month, when the pandemic strangled lending.
The central bank’s monthly money and credit report said: The mortgage market showed some signs of recovery in June but remained relatively weak in comparison to pre-Covid.
In February, before the virus hit the UK economy, the bank reported 73,700 monthly mortgage approvals.
The report also revealed households repaid £86 million of consumer credit last month, as the lockdown reduced opportunities for people to spend.
Meanwhile, households borrowed an extra £1.8 billion in loans in June, following larger net repayments in April and May of £7.3 billion and £3.3 billion respectively.
UK households and businesses strengthened their financial holdings by £16 billion in June, amid a slowdown in deposits from the past three months.
Hugh Wade-Jones, managing director of Enness Global Mortgages, said the figures are “yet more signs that the wider housing market has bounced back from pandemic paralysis with mortgage approvals now sitting at more than four times the levels seen in May”.
He added: This is largely due to the influx of buyer demand that hit the market following the easing of lockdown restrictions and demonstrates a market on its way back to good health. These figures are still lower than we would expect in ‘normal’ circumstances, but given the challenges caused due to Covid-19, it’s a very positive sign for the market.
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