Mortgage Lending steady, but consumer credit weakens

Figures from the British Bankers Association for March reveal that mortgage lending is in line with banks expectations.

The BBA which represents the main banking groups reported that net mortgage lending in March rose by £4.5bn. A fall of £0.2bn off February’s figure.

Lending to real estate was the largest component of increased lending to non-financial companies, rising above trend, at +£2.2bn.

Overall, net lending rose by £5,062mn in March, compared to £5,498mn in February and £7,166mn in March 2004. Mortgage lending accounted for £4,538mn of the rise, compared to February’s rise of £4,786mn. Within consumer credit, March saw an increase in loans & overdrafts of only £386mn compared to February’s figure of +£669mn, while the rise in credit card borrowing (+£138mn) was again well down on the recent average (+£225mn).

David Dooks, BBA director of statistics, said:
“Whilst the trend in monthly mortgage growth has moderated gradually over the last year, it now appears to be stabilising and it is worth noting that monthly rises of around £4.5bn are higher than at any time prior to April 2002, showing that the market clearly has some inherent strength which is underpinning demand. The expected stimulus to consumer credit of Easter falling in March was not evident, with card borrowing particularly weak.”
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