Mortgage lending levels off

In July, mortgage lending rose by £4.3 billion; the same as in June according to figures from the British Bankers Association.

The BBA said the number of house purchase approvals continues to be very low while those for remortgaging have fallen.

Net mortgage lending in July was similar to both May and June, maintaining an annual growth rate of
12.0%. Approval activity continued to decline during July, particularly for remortgaging and gross lending in the month was 3% lower than in June and 25% lower than a year earlier.

Approvals for house purchase may be stabilising, at a very low level in July, some 65% lower than a year ago. Approvals for remortgaging in July were 21% lower than last year but were still around 50% of all approvals.

BBA statistics director, David Dooks, said of the latest data: “The monthly numbers of approvals for house purchase, which have fallen by some two-thirds over the last year, levelled off in July. It would, however, be premature to think that the housing market will now start to recover, because overall approval activity continues to be very low. The pressures on household budgets are reflected in the relatively weak rise in individuals’ deposits and, with consumer borrowing growing only slowly it seems that consumers are acting prudently.”