UK households borrowed an additional £2.7bn secured on their homes during July, up from £2.4bn in June, new data published by the Bank of England (BoE) has revealed.

The BoE suggested that the mortgage market had shown more signs of recovery in July, but added that the £2.7bn borrowed during the month remained “weak” in comparison to pre-pandemic levels – sitting below the average of £4.2bn in the six months to February 2020.

The number of mortgage approvals for house purchases also continued a recovery in July to reach 66,300, up from 39,900 in June.

The Bank’s data showed that approvals are now 10% below the February level of 73,700, but more than seven times higher than the trough of 9,300 recorded in May. Approvals for remortgage, which capture remortgaging with a different lender, showed little change compared to June, at 36,000. The BoE stated that this figure remains 30% lower than in February.

Commenting on the figures, Phoebus Software sales and marketing director, Richard Pike, said: “As July was the first month that the stamp duty holiday came into effect, the impetus that we expect it to give to the market was not particularly evident in these figures from the BoE. However, all the evidence points to a continued recovery with many estate agents reporting a surge in properties coming to market.
 
“The number of properties coming to market reflects many different scenarios, are people selling because they can get a better price while the stamp duty holiday is in effect, or are some having to sell because of a change in their circumstances?

“For now, the housing market is, in relation to many other sectors, in rude health, and likely to remain that way at least until next April.”

Landbay CEO, John Goodall, added: “This trajectory of increasing house purchases is what we would have expected as lockdown rules continue to be relaxed. The stamp duty holiday has clearly given the boost needed to encourage people to buy again although there is inevitably an amount of caution, both from a health and a financial point of view.
 
“While we are yet to see the effect the end of the furlough scheme will have on residential purchases, I expect the number of transactions to continue to recover for the rest of this year and the first quarter of 2021, particularly in buy-to-let, as the demand for rental property continues to increase.”

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