The amount of money lent on new mortgages fell by a third in June. Mortgage..." />

Demand for mortgages dips

The amount of money lent on new mortgages fell by a third in June. Mortgage debt fell by 33.75% compared to May and now sits at £5.3bn, although it remains above pre-pandemic levels of £4.3bn, according to figures from the Bank of England. The data suggests that the cost of living crisis is dampening the housing market. Increasing inflation is also driving up the interest charged on mortgages. The 'effective' interest rate – the actual interest rate paid – on new mortgages also increased by 20 basis points to 2.15% in June. The rate on existing mortgages ticked up 4 basis points to 2.11% as the Bank of England raised interest rates. There are also signs of a slowdown in the housing market with approvals for house purchases, down to 63,700 in June, from 65,700 in May, below the 12-month pre-pandemic average up to February 2020 of 66,700. The figures reflect house purchases which were agreed several months ago, which suggests that appetite for new mortgages could continue to decrease. 

Daily Mail (29/07/2022)   Evening Standard (29/07/2022)   The Guardian (29/07/2022)   The Times (29/07/2022)  

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