"What is encouraging is that new mortgage approvals are not tailing off but putting in a surprisingly upbeat performance in the face of some pretty intimidating headwinds."
The Bank of England noted that "house purchase approvals were stronger than recent months, returning to the levels seen at the beginning of the year".
Approvals for remortgaging, at 46,231, were also stronger and have been on a slight upward trend, hitting their highest level since December 2016.
Figures also show that the £3.6 billion flow of net secured lending in July was similar to recent months.
Alastair McKee, Managing Director of independent mortgage broker, One 77 Mortgages, commented: “There’s life in the old dog yet as canny homeowners continue to lock in cheap deals while they can before the spectre of interest rate rises looms.
“What is encouraging is that new mortgage approvals are not tailing off but putting in a surprisingly upbeat performance in the face of some pretty intimidating headwinds.
“Don’t forget that annual UK house market growth has more than halved in a year, transaction levels have been dropping, business investment is down and retail sales growth slowed at the fastest pace in over a year last month.
“Borrowers don’t seem to be paying any of that much attention and first time buyers could be driving a lot of this traction. They won’t want to miss the party and will be keen to take advantage of low rates themselves.
“However, new approvals are unlikely to be to blame for swollen stamp duty receipts confirmed this week. In fact that’s more likely to be explained to some degree by the stamp duty surcharge on second homes.”
Andy Knee, chief executive of LMS, added: “Remortgage approvals soared to their highest level this year as competitive deals offered by lenders enticed homeowners to make the switch. Remortgage approvals are also significantly higher than a year ago – the result of months of rock bottom mortgage rates – which have enabled homeowners to save more on their monthly repayments.
“The second half of 2017 will likely pose a challenging set of circumstances for the wider economy, most notably, the ongoing Brexit negotiations. We are already witnessing people remortgage onto longer term deals2 for added certainty and financial security and we expect this trend to continue as long as the macroeconomic climate grows ever more precarious.”
