UK mortgage approvals stay strong

Many analysts do not think mortgage growth can continue

The number of new mortgage approvals in the UK remained steady during July, the Bank of England has reported.

A total of 115,000 new mortgages were agreed last month, surprising analysts who had been expecting a fall as a result of rising borrowing costs.

July's total was the same as the Bank's revised figure for June, despite predictions of a decline to 110,000.

The Bank also said that UK credit card debt rose by £224m during July, with the total level now at £53.5bn.

Overall unsecured borrowing rose by £1.1bn last month, the biggest monthly increases since November last year.

Correction 'long overdue'

In financial terms, mortgage lending in July increased by £9.19bn compared with June's downwardly-revised rise of £9.34bn.

Mortgages have become more expensive over the past year as lenders have passed on the five interest rate rises from the Bank of England.

Alan Clarke, economist at BNP Paribas said UK mortgage approvals showed "remarkable resilience in July", but cautioned that this could not continue for ever.

"A correction is long overdue," he warned.

Earlier on Thursday, the Nationwide building society said that there were now "clearer signs" that demand in the UK housing market was slowing, as it unveiled its latest property survey.

The Nationwide said UK house prices rose 0.6% in August, but the annual rate of house price inflation fell to 9.6% from 9.9% in July.