July fillip fails to lighten gloom on home loans

July was the best month for mortgage lending in more than a year, but the figures did little to dispel the gloom over the housing market today.

The Bank of England's figures showed 49,239 home loans approved, the best since May 2010 but still little more than half the levels seen during the boom, and scarcely enough to stir the market from its current torpor.

The most exclusive areas of central London are proving the exception amid little sign that riots have damaged the capital's safe-haven reputation. Prices were up 0.9% in August, according to agent Knight Frank.

Ernst & Young ITEM Club senior economic adviser Andrew Goodwin called the market "essentially stagnant".

He warned: "The housing market is drifting along, with prices and activity levels going nowhere fast. If it were not for the relatively buoyant prime London market, the figures would look even worse."

Bovis Homes more than doubled pre-tax profits to £8.1 million in the first half of the year.

Chief executive David Ritchie said the housebuilder is selling nearly twice as many homes in the South as the North.

The firm expects to grow sales by up to 10% this year in a "stable but challenging" market.