The figures revealed that:
- Gross mortgage lending was £14.2bn in December. This was 3% lower than November, and 10% lower than in December 2003. Showing an upturn from November, the underlying seasonally adjusted rise in net lending (gross lending minus repayments), was £5.2bn in December; bringing the annual increase to £62.3bn, virtually the same as in 2003.
- The weakness in December’s approvals (for all purposes) was particularly noticeable this year with 134,700 loans approved for a total value of £11.5bn. In volume terms, these were 14.5% down on November and 29% weaker than December 2003. The average approval for house purchase fell back, to £118,100.
- Growth in overall net consumer credit (£0.8bn, seasonally adjusted) weakened in December, in line with weak retail sales. The increase in loans and overdrafts (+£0.4bn) was lower than the monthly average of £0.5bn, while credit card borrowing (£0.3bn) was a little stronger than November, but still lower than the previous six months’ average (£0.4bn).
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 £62.3bn. 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.
"The modest growth in banks’ consumer credit lending over the month reflected the apparent weakness in consumer sentiment suggested by December’s retail sales index."
- December’s gross lending of £14,237mn was 2.6% lower than November’s total (£14,610mn) and compared with £15,794mn in December 2003.
- Net mortgage lending rose in reported terms by £5,741mn, but this was inflated by around £0.5bn of internal group transactions, which did not represent increased demand from customers. The underlying rise was stronger than November’s £3,665mn, although the annual growth rate remained at 14%.
- Compared to the same month a year earlier, December’s approvals of house purchase loans were 38% lower by number and 31% lower by value; remortgaging loans were 15% lower by number and 2% lower by value; and equity withdrawal loans were 34% lower by number and 28% lower by value.
- New borrowing on credit cards totalled £8,099mn in December. This was slightly stronger than the average of the previous six months, but with repayments continuing to hold up, a seasonally adjusted increase in net lending of £335mn resulted; 10% down on the recent average (+£371mn).
- New lending on personal loans and overdrafts, at £2,612mn, was well down on both the average for the previous six months (£3,297mn), and previous Decembers. After seasonal adjustment, the rise in net lending of £416mn was well below the average rise of £517mn over the previous six months.
