Mortgage figures continue to slow

November’s mortgage lending rose more slowly than in October and approvals were again low, data from the main banks has shown.

The British Bankers Association (BBA) said that as expected, gross mortgage lending
was weaker in November and, as approvals remained low, this weaker picture is likely to be maintained in the coming months.

Although net mortgage lending was weaker in November, the overall picture of monthly lending growth has dipped noticeably towards the bottom of the range (minimum + £4bn,
maximum + £6bn over the last 3 years).

During the month, a total of 44,811 mortgages were approved for home buying, 58,701 for re-mortgaging and 38,467 for equity withdrawal or other purpose.

House purchase approval numbers in November were similar to October’s record low, as pressures on household finances and other factors combined to suppress demand. Approvals for remortgaging rose slightly, and continue to account for an historically high share of all approvals as customers seek alternative deals. Loans approved for equity withdrawal and other purposes continued to decline gently.

BBA statistics director, David Dooks, said of the latest data: “Mortgage activity is notably lower than this time last year and, as we expected, lending has begun to slow down. Judging by the significantly lower number of mortgage approvals in October and November - partly resulting from lower demand, partly from tighter supply - the market is likely to continue slowing in the coming months.

Tighter household finances and uncertainty in the financial markets are driving consumer behaviour. Deposits are weak and unsecured borrowing remains subdued, despite a marginal rise in November”.