Mortgage borrowing more than doubled to £2.7bn in June from £1.3bn the month before, the latest data from the Bank of England shows.
The annual growth rate for net mortgage lending rose to 0.5% last month, after a rise to 0.3% in May, “continuing the trend seen in previous months,” adds the central bank’s June Money and Credit report.
Mortgage approvals for house purchases, an indicator of future borrowing, remained broadly stable at 60,000 in June.
Remortgaging approvals, with a new lender, fell to 27,500 last month, from 29,300 in May.
Gross lending fell 8% to £20.8bn in June, from the previous month, while gross repayments slipped 7.9% over the same period to £18.7bn.
The data comes ahead of the central bank’s Monetary Policy Committee’s meeting to set the base rate on Thursday.
Economists say the decision to cut the rate from its 16-year high of 5.25%, where it has stood since last August, will be “a close call”.
The Bank’s data also comes after a range of lenders have cut home loan rates over the last two weeks, anticipating a rate cut over the next two months, including Nationwide, which reintroduced sub-4% fixes.
Bluestone Mortgages head of sales & distribution Mark Hollands says: “Today’s mortgage approvals indicate that consumer confidence remained steady.
“This combined with major lenders cutting rates in anticipation of a base rate reduction should see demand for property rise in the second half of the year.”
SPF Private Clients chief executive Mark Harris adds: “Mortgage approvals for new purchases held steady, while remortgage approvals dipped although the latter may be down to borrowers sticking with their existing lender rather than going through the longer process of remortgaging to another provider.
“With inflation sticking at its 2% target, an interest rate cut is increasingly likely, with some expecting it to come on Thursday.
“When it does happen, it will give the market a welcome boost and lenders more confidence to price their mortgage rates lower. It may even result in an uptick in mortgage approvals in coming months, particularly if successive rate reductions are forthcoming.”
Octane Capital chief executive Jonathan Samuels points out: “Now that the political dust has settled [after the general election] we expect to see the nation’s buyers returning to the fold and this increase in activity should only strengthen as the prospect of an interest rate cut looms ever closer.
“We’re also seeing lenders act in anticipation of a reduction in the base rate, with the average daily swap rate already starting to decline in recent weeks.
“This is a leading indicator that the mortgage rates currently on offer could soon start to reduce, if they haven’t done so already.”
Broadstone director, risk, Tom Cuppello adds: “Mortgage borrowing reached its highest level in over 18 months in June 2024, more than doubling from the previous month’s total as confidence appears to be returning to the property market.
“Mortgage rates continue to creep down but although there has been no significant reduction it appears many buyers are no longer putting their property purchase plans on hold.
“With this week’s interest rate decision on a knife-edge, lenders and borrowers will be closely watching the Bank of England’s communications on Thursday to gauge the path forward.”
