Mortgage approvals weaker
Just released figures from the BBA - the banking and financial services trade association - point to weaker mortgage approvals and subdued consumer credit.
June’s gross mortgage lending of £21.5 billion, the highest figure ever, was a reflection of strong re-mortgaging activity. This was, however, only 5% higher than a year earlier, suggesting that in real terms, lending growth is slackening.
There were 193,850 mortgages approved (for all purposes) in June; 8% fewer than in June 2006, with an aggregate value of £23.1 billion. The average loan approved for house purchase was £159,600, some 16% higher than a year earlier.
Meanwhile, underlying net mortgage lending (gross lending minus repayments and redemptions) rose by £5.4 billion, lower than May’s increase (£5.9 billion) but in line with the recent average.
The annual growth in net mortgage lending continued to stay around 14%.
Elsewhere, credit card borrowing fell by £0.1 billion (net) in the month, while borrowing on personal loans and overdrafts rose by £0.1 billion.
David Dooks, BBA director of statistics, says that although the trend in net mortgage lending is being maintained, approval numbers for house purchase are well down on this time last year, suggesting that market demand may be reacting to higher mortgage costs.
Spending on credit cards was lower than at the same time last year, reflecting weaker retail sales but the reducing appetite for unsecured borrowing continues the pattern seen over the last two years.