The main high street banking groups in the UK allowed gross and net mortgage lending to pick up slightly in June as the number of new loans approved for home purchase rose to a 15-month high. The data indicates that the UK residential property market is bottoming out, but still faces tight availability of credit and the uncertain economic outlook.

The number of mortgage approvals for house purchases increased for a third consecutive month to 35,235 in June from 31,919 in May. Net mortgage lending increased slightly to GBP2.6 billion in June from GBP2.4 billion from May. The figures are a sign of optimism, yet housing market activity is likely to remain below long-term norms for a while to come.

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