While the Bank found that the increase in net lending secured on dwellings was £300m, which was unchanged from May, approvals for house purchases, 47,584, were higher than May’s 44,169 and above the previous six-month average.
The increase in total net lending to individuals in June of £400m was lower than both the May increase of £500m and the previous six-month average.
The Building Societies Association, which also released its June data this morning, says gross mortgage lending by building societies was £1.976bn in June 2009, compared to £3.254bn in June 2008.
BSA head of savings policy Brian Morris says: “Gross mortgage lending by building societies was just under £2bn in June 2009, the highest level seen this year, and up 30 per cent on May, but mortgage approvals show signs of
In the savings market, building societies experienced a net withdrawal
of £2.239bn in June this year, compared to a net inflow of £419m in June last year.
Morris says: “The withdrawal experienced by the building society sector is not unexpected given the very challenging economic backdrop. With rising unemployment, subdued income growth and the official Bank Rate at an historic low, it is very difficult to attract retail savings. In addition, there is evidence households are looking to take advantage of the low interest rates to pay off debt rather than save.”
Council of Mortgage Lenders economist Paul Samter says: “Activity is certainly more positive than at the start of the year. This is consistent with the improvement in housing market sentiment, but the outlook is still sluggish.
“Overall, these numbers are consistent with our outlook for a gradual improvement from historic lows following the financial system turmoil last year, but for any recovery to be slow and drawn out.”