Net borrowing of mortgage debt by individuals fell to £5.3bn in June, down from £8.0bn in May, new figures from the Bank of England (BoE) have revealed.

The latest figure from the BoE is above the pre-pandemic average of £4.3bn in the year up to February 2020.

Gross lending decreased to £25.4bn in June from £28.1bn in May, while gross repayments decreased slightly to £20.3 billion from £21.2 billion.

The figures also showed that approvals for house purchases, which the Bank uses as an indicator of future borrowing, decreased to 63,700 in June. This was down from 65,700 in May, which is below the 12-month pre-pandemic average up to February 2020 of 66,700.

Approvals for remortgaging, which only capture remortgaging with a different lender, also saw a decrease in June, to 44,000 down from 47,200 in May. This figure also remains below the 12-month pre-pandemic average up to February 2020 of 49,500.

Responding to the latest BoE figures, Air CEO, Stuart Wilson, said the UK mortgage market had “once again proved its resilience”, but warned that its outlook shows the market still faces the rising cost of living combined with rising interest rates.

“In the past, younger generations have often turned to the Bank of Mum and Dad for financial support to help them step onto the housing ladder,” Wilson commented. “In 2022, with house prices continuing to rise, this is likely to remain the case for some families while others may need broader financial support or see their older relatives using their housing equity to boost their retirement income.

“As the UK’s economic environment evolves, it’s vital that older homeowners can access specialist advice for knowledgeable advisers they can trust so they can benefit from understanding all the financial tools at their disposal to support them and their families, for some this may include later life lending.”

Gatehouse Bank chief commercial officer, Paul Stockwell, added: “With the cost of living rising, record inflation and several months of consecutive interest rate hikes, it’s not surprising that the demand for mortgages has dipped. The short supply of homes and rising house prices over the last few years have also impacted property transactions as buyers look to delay purchases until market certainty returns.

“We are just concluding what is traditionally the busiest period for property purchases each year, and as mortgage market professionals and their clients go on holiday over the summer months, we would expect a slowdown in activity.

“It is also important to remember that year-on-year numbers are being compared to a period characterised by the Stamp Duty holiday, and appetite for purchase will naturally have seen a decline since this ended in June 2021.

“It’s key to stress that there is still a strong pipeline for future borrowing and we are gaining interest from new and existing borrowers despite the economic hurdles and supply issues. In the current climate, one marked shift has been a trend towards longer term fixes both for those looking for a mortgage or indeed to remortgage.”

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