UK Mortgage Lending Surges Amid Rising Interest Rates

Mortgage lending in the UK increased last month despite rising interest rates for homeowners. According to figures from the Bank of England, net borrowing of mortgage debt jumped to £7.7 billion in June, compared with £3.3 billion in May.

The number of mortgage approvals for home purchases also rose to 58,200 for the month, up from 56,600 in May. This comes as the average two-year fixed residential mortgage rate sits at 5.62%, while a five-year mortgage averages 5.66%.

Experts attribute the modest rise in mortgage approvals to a period of relative economic stability following recent Bank of England decisions to keep interest rates at 3.75%. Nathan Emerson, chief executive at Propertymark, said that buyers may be responding positively to this stability.

However, while confidence is improving, activity has yet to fully recover. Consumer credit borrowing also increased in June, driven by a rise in credit card lending. Other forms of consumer credit, such as car loans and personal loans, decreased.