By Claire West

Gross mortgage lending by mutuals was £2.0 billion in July, the highest monthly figure so far this year, and 11% higher than the £1.8 billion lent in June. Mortgage approvals made in July amounted to £1.9 billion, the same as in June.

Commenting on the figures, Adrian Coles, Director-General of the BSA,

said:

"Lending by mutual mortgage providers has picked up over the summer months, and the approvals figures suggest this level of lending may continue in the near future. Nevertheless, while the outlook appears a little brighter, there remain significant challenges such as heightened uncertainty about job prospects and household incomes, potentially limiting future demand. This could make it difficult to sustain the growth in activity."

Savings balances held at mutuals decreased by £1.0 billion in July, having stayed broadly flat in June. Without including interest that was added to accounts, £1.3 billion was withdrawn from savings accounts at mutuals in July, compared to £0.3 billion in June.

Commenting on the savings data, Mr Coles said:

"The withdrawals may indicate the difficult economic conditions that households currently face. In addition, these withdrawals could have been intensified by competitive rates from NS&I, which subsequently withdrew products in the middle of July in the wake of considerable inflows."