Mortgage lending dips during June

Lending remains quiet according to the main British banks.

Net mortgage lending in June rose by an underlying £4.6bn, only £0.1bn more than in May and remaining in line with the average increase in the previous six months. Growth in overall unsecured personal lending (+£0.4bn) was again relatively weak. Of this, loans & overdrafts were virtually flat (compared with the recent average of +£0.5bn), whilst credit card borrowing increased by £0.3bn.

Lending to real estate, at +£1.8bn, was the largest component of lending to non financial companies, much stronger than May and the six-month average of +£1.1bn. Lending to retail trade increased by £0.9bn while lending to various industrial categories (+£2.3bn) was partly boosted by takeover activity.

David Dooks, BBA director of statistics, said: “Overall lending by the major banks to individuals continued on a steady path in June. Whilst demand for mortgages has slowed from the peaks of 2004, it is still growing, at a fairly constant, annual rate of around 12%. The appetite for unsecured consumer credit, on the other hand, appears to be subdued, with individuals also maintaining strong deposit inflows. This all suggests lower consumer spending, which may be a reason for increased lending to retailers and wholesalers.”