The number of first time buyers applying for loans also increased significantly, some 18%, giving hope that the battered property market is genuinely on the road to recovery, all be it a slow one.
The figures from the Council of Mortgage Lenders show that took out a total of 56,000 loans totalling £7.5 billion, 24% more than in June and 19% more than in July last year.
The value of those loans was up 27% on June’s figure, and 6% higher than in July 2008.
Loans to first time buyers increased to 20,400, up 18% in July compared to the previous month, and by 22% compared to July 2008. While remortgaging increased by 21% in July compared to June, the percentage was still 53% down compared to July 2008.
More than three quarters of the loans taken out in July had fixed rates, with borrowers able to lock in to an average fixed rate of 4.7%, substantially below the average of 5.57% during the past decade.
But the CML said that there is still a considerable way to go in terms of a rejuvenation in lending.
‘It's tempting to call the turn in the mortgage market at this point, and there is certainly concrete evidence that lending for house purchase is increasing.
But there are still constraints affecting the lending industry's capacity to fund increased lending, as well as less consumer motivation to remortgage for the time being,’ said Paul Samter, CML economist.
‘The overall lending picture is likely to stay relatively subdued for some time, especially as the wider economy is far from robust as yet,’ he added.
