Mortgage lending remains sluggish for August. However, net lending secured on homes was up £1.7 billion, above the previous six-month average of £0.7 billion

The summer holidays hit mortgage approvals for August as the Bank of England revealed total loans to buy a home dropped to 47,372 during the month.

This is down on the July figure of 48,346 and the month-on-month average of 48,619 that had held since February 2010.

In contrast, remortgage approvals increased to 28,042 for July, a figure that was higher than the previous six-month average of 26,765.

Net lending secured on homes was up £1.7 billion, above the previous six-month average of £0.7 billion.

The twelve-month growth rate remained at 1.0%. The three-month annualised growth rate increased to 0.8%, from 0.5% in July.

Commenting on the Bank of England statistics, Simon Rubinsohn, RICS chief economist said: “The data shows activity in the housing market remains subdued.

“Lack of availability of mortgage finance remains a key factor depressing the housing market, although increasing concerns about the outlook for the economy may also be impacting adversely on buyer interest. Significantly, today’s numbers alongside figures from HM Revenue and Customs suggest that the proportion of properties being bought without a mortgage remains relatively high.”

The Building Societies Association (BSA) also published gross mortgage lending figures for August.

Lending was £2 billion for the month, which is unchanged from July.

Mortgage approvals by the mutuals in August amounted to £1.8 billion, just below the £1.9 billion reported for July.

Paul Broadhead, the BSA’s head of mortgage policy said: “Both gross lending and mortgage approvals by mutuals in August broadly matched the year-high figures recorded in July, which is encouraging, particularly when assessed against wider industry trends.

“However, the market continues to show falling levels of demand and a flattening out of house price growth. With continued economic uncertainty, lending activity could fall back if buyer interest continues to show signs of weakness.”

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