Subdued mortgage market

The number of new mortgages approved for house purchase by British banks was 6pc lower in July 2004 according to the British Bankers Association.

Gross mortgage lending was £16.0bn in July. This was slightly lower than June and 11% lower than in July 2004.

Net mortgage lending rose by £3,745mn, compared with £4,670mn in June. The July rise was well down on the average of +£4,435mn in the previous six months leaving the annual growth rate hovering around 12%; the lowest growth rate since February 2002.

There were 181,933 mortgage approvals (for all purposes) in July, with a total value of £17.1bn. The number of approvals was 7% lower than June and 17% weaker than July 2004. The average approval for house purchase was £132,700.

David Dooks, BBA director of statistics, said: “July’s rise in net mortgage lending was the weakest since December 2001 but the weakness resulted largely from higher than usual levels of redemptions, particularly relating to maturing fixed rate loans.

Together with relatively slow approvals, it reiterates the subdued mortgage environment of late. More cautious consumer sentiment, in line with reports of weaker retail sales, was also reflected in lower demand for personal loans and very modest credit card borrowing.”