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28/01/2005
Mortgage lending expected to remain 'subdued'
Mortgage approvals fell by over a third last month, new figures from the British Bankers' Association have shown.
The BBA reported that house purchase loans were 38% lower by number and 31% lower by value in December. Remortgaging loans were also reduced by 15% in number and 2% in value, while equity withdrawal loans fell by 34% in number and 28% in value.
The average approval for house purchase also fell back, to £118,100 last month.
The BBA report revealed that gross mortgage lending was £14.2 billion in December, which was 3% lower than November and 10% lower than December 2003. However, the report said that the underlying seasonally adjusted rise in net lending (gross lending minus repayments) was £5.2 billion in December, which brought the annual increase to £62.3 billion, which was virtually the same as 2003.
Net mortgage lending rose in reported terms by £5,741 million, but, the report said, this was inflated by around £0.5 billion of internal group transactions, which did not represent increased demand from customers. The underlying rise was stronger than November's £3,665 million, although the annual growth rate remained at 14%.
David Dooks, BBA director of statistics, said: "Despite an upturn in net mortgage lending in December, in part reflecting a processing catch-up, the general slowdown in demand over the last six months saw lending in 2004 matching 2003's increase of £62.3 billion. This time of year sees a seasonal weakness in loan demand, but with approval volumes running well below those in the same month a year earlier, mortgage lending is expected to remain relatively subdued in the near-term."
(KMcA/SP)
The BBA reported that house purchase loans were 38% lower by number and 31% lower by value in December. Remortgaging loans were also reduced by 15% in number and 2% in value, while equity withdrawal loans fell by 34% in number and 28% in value.
The average approval for house purchase also fell back, to £118,100 last month.
The BBA report revealed that gross mortgage lending was £14.2 billion in December, which was 3% lower than November and 10% lower than December 2003. However, the report said that the underlying seasonally adjusted rise in net lending (gross lending minus repayments) was £5.2 billion in December, which brought the annual increase to £62.3 billion, which was virtually the same as 2003.
Net mortgage lending rose in reported terms by £5,741 million, but, the report said, this was inflated by around £0.5 billion of internal group transactions, which did not represent increased demand from customers. The underlying rise was stronger than November's £3,665 million, although the annual growth rate remained at 14%.
David Dooks, BBA director of statistics, said: "Despite an upturn in net mortgage lending in December, in part reflecting a processing catch-up, the general slowdown in demand over the last six months saw lending in 2004 matching 2003's increase of £62.3 billion. This time of year sees a seasonal weakness in loan demand, but with approval volumes running well below those in the same month a year earlier, mortgage lending is expected to remain relatively subdued in the near-term."
(KMcA/SP)
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Credit card spending slows as mortgage demand grows
Consumer borrowing slowed in January due to more moderate credit card spending after Christmas. Total lending to individuals, including mortgages, bank loans and credit card spending, grew by £6.9 billion in January, £200 million less than in December. Credit card spending and overdraft borrowing expanded by £1.6 billion, down from £2.
Credit card spending slows as mortgage demand grows
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