Mortgage lending low in July

Mortgage lending dropped to its fourth lowest level since records began during July, sparking fears of a double dip in house prices.

Net lending totalled £86million, a dramatic fall from June’s £518million, the Bank of England said.

The number of approved mortgages rose marginally to 48,722 - still significantly down on the levels of more than 100,000 a month during the housing boom.

For some market analysts, the figures confirm the housing market is heading for a double dip, with net mortgage lending flat and the number of mortgage approvals low.

Net lending, which does not include repaid or redeemed loans, was the fourth lowest figure since Bank records began in 1993, and less than 1 per cent of the amount that was lent during the housing boom, when £10 billion was lent in a single month.

The gross amount of money banks and building societies lent was £7.1 billion, also slightly up. However, borrowers paid back nearly as much to their lenders, resulting in the very modest net figure of £86 million.

The number of approvals was also down on November’s recent high of just over 59,000, with the housing market failing to benefit from its traditional summer bounce.