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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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