"A dip in mortgage approvals in June could be the first sign that the market is settling back to some sort of normality after the frenetic action we’ve seen recently."
The previous record, in March 2021, was £11.5 billion, and borrowing has averaged £5.4 billion in the 12 months to May 2021.
The Bank says its figures suggest there has been a shortening of time between a mortgage being approved and the lending itself, as there was no large rise in the number of mortgage approvals in recent months, unlike ahead of the strong net borrowing in March.
Gross lending increased to £43.8 billion, with gross repayments also increasing to £27.7 billion.
Mortgage approvals for house purchase were 81,300 in June, down from 86,900 in May. This is the lowest since July 2020, but remains above pre-February 2020 levels.
Approvals for remortgaging with a different lender rose slightly to 35,400 in June, from 34,800 in May. This remains low compared to the months running up to February 2020.
Richard Pike, sales and marketing director at Phoebus Software, said: “A dip in mortgage approvals in June could be the first sign that the market is settling back to some sort of normality after the frenetic action we’ve seen recently. Coupled with Nationwide’s reported fall in house prices you could be forgiven for thinking we are heading for another downturn. However, there is one factor that is likely to keep the market moving for both purchase and remortgaging, and that is mortgage interest rates and the current flurry of fixed-rate deals that are being announced on an almost daily basis. It appears that lenders are determined to keep the momentum going, and with 2-year fixes as low are 0.75% there is plenty of incentive for borrowers.
“With high street banks and building societies reporting record mortgage growth this year, there is plenty of scope for these historically low-interest rates and we can expect to see more and more tempting deals. We are already seeing remortgage activity gaining momentum, as the supply of properties coming to market slows. As current fixed rates come to an end we may see the pendulum swing from record purchase levels back to a growing remortgage market.”
Jeremy Leaf, north London estate agent and former RICS residential chairman, commented: "As expected, these numbers are very strong, reflecting the frenzy as buyers tried to beat the stamp duty taper at the end of June.
"However, they don’t reflect what happened immediately afterwards and whether that level of activity was able to be sustained. We will be looking very closely at the next set of figures for mortgage approvals in particular as they always provide a useful direction of travel for the market. Only then will we be able to see just how far activity has fallen but certainly we don’t expect a major change based on what has been happening in the past few weeks on the high street."
