Net borrowing of mortgage debt across the UK increased to £2.7bn in June, up from a total of £1.3bn in May.

New Bank of England (BoE) figures have also shown that gross lending decreased to £20.8bn in June, from £22.6bn in May, while gross repayments fell by £1.6bn over the same period, to £18.7bn.

The annual growth rate for net mortgage lending rose to 0.5% in June, after a rise to 0.3% in May, continuing a trend seen in previous months.

According to the Bank’s figures, net mortgage approvals remained broadly stable at 60,000 in June, while approvals for remortgaging – which only capture remortgaging with a different lender – decreased to 27,500 in June, from 29,300 in May.

Personal finance analyst at Bestinvest by Evelyn Partners, Alice Haine, commented: “Mortgage rates have continued to ease in recent weeks with sub-4% fixed mortgage rates returning to the market as hopes a summer rate cut, perhaps as early as this week, will ease the borrowing crunch even further. How much respite it will deliver will depend on what type of mortgage someone has and when their deal ends.

“A UK rate reduction would deliver instant relief for new borrowers and those on trackers, but it won’t soften the struggle for mortgage holders locked into fixed rate deals with some time left to run.”

The BoE’s figures also indicated that the “effective” interest rate – the actual interest paid – on newly drawn mortgages saw a slight increase of three basis points, to 4.82% in June.

Similarly, the rate on the outstanding stock of mortgages rose by four basis points to 3.65% in June, from 3.61% in May.

Haine added: “If a rate cut materialises this week, mortgage demand may ramp up from here as more people look to take advantage of improving lending conditions. Many buyers have been waiting patiently for borrowing costs to ease further before making a move, so that first rate cut set against the backdrop of a more stable political landscape could provide the impetus to get going on those plans.”

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