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Repayments outweigh lending for first time

Net repayments of debts outweighed the total amount lent to individuals for the very first time in July.

According to lending data from the Bank of England, total net lending to individuals fell to -£600m in July, down from £200m in June – a net repayment for the first time in the Bank’s series since its inception in 1993.

Within the total, mortgage lending showed a net repayment of £400m, weaker than the June increase of £100m and below the previous six-month average.

It also found that the numbers of loan approvals for house purchase of 50,123 and for remortgaging, 35,206 were both higher than in June and above the previous six-month average.

CML economist Paul Samter says: “Activity still remains weak, but has improved from the historic low levels of turnover at the beginning of the year. We expect volatility in net lending levels over the rest of the year and there may be other months in which negative net lending occurs as the recovery is likely to be sporadic and shaky at first.”

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