Homebuyers will be encouraged to hear that both the number and total value of mortgage approvals rose last month, coming in at £9.2 billion. This represented a slight increase on June figures, significantly exceeded the six-month average to July of £8.2 billion. The figures suggest a tentative recovery in the mortgage market, spurred on by the government's Help to Buy scheme.
However, approval rates were largely buoyed by an increase in re-mortgages, with new mortgage approvals dropping slightly from 37.3 thousand to 37.2 thousand. Net mortgage lending similarly fell, as persistent low interest rates pushed consumers to divert savings into repaying mortgage debt.
Naturally, these opposing signals elicited conflicting reactions from members of the Twitter business community.
In spite of depressed business lending, revised GDP figures from the ONS actually show business investment grew 0.9 per cent in the second quarter, suggesting the reluctance of mainstream banks to lend to SMEs may be pushing many to pursue alternative sources of finance.
In the case of both homebuyers and SMEs, this latest report from the BBA shows mainstream bank lending to be muted at best, underlining the importance of encouraging both groups to consider lenders beyond the High Street.
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