Stronger mortgage lending but weaker consumer credit
Latest figures from the Major British Banking Groups, for September 2005, show that:
- Total sterling lending to the UK private sector showed a net underlying increase of £6.8bn (+0.6%) to £1,141bn. This was in line with the previous month’s underlying rise of £6.9bn but lower than the average of +£8.8bn over the previous six months.
- Net mortgage lending in September rose by an underlying £5.0bn. This was up both on August’s rise of +£4.4bn, and the average of +£4.4bn over the previous six months. Underlying growth in overall unsecured personal lending (+£0.5bn) was lower than August but in line with the average of the previous six months. Of this, loans & overdrafts rose by £0.4bn (in line with the recent average of +£0.4bn), whilst credit card borrowing rose by £0.1bn.
- Lending to real estate companies was once again the largest component of lending to non-financial companies, rising by £1.7bn. Lending to retail trade was £0.6bn higher. These increases were partly offset by a net repayment from hotels & restaurants.
- Deposits from the private sector rose by £6.1bn (+0.8%) to £802bn. Of the total increase, personal deposits accounted for a strong rise of £3.4bn .
David Dooks, BBA director of statistics, said: "With recent months’ higher approval volumes working their way through to lending, September saw a stronger figure for mortgage lending than of late, maintaining the very stable trend we have seen throughout this year.
Credit card lending continues to be very subdued, consistent with the current picture of weak consumer spending."
Analysis of MBBG sterling lending to UK public and private sectors
Lending to individuals (after allowing for the effects of securitisations, loans acquired from special purpose vehicles, transfers, acquisitions, etc – see note 4 below).
Net lending rose by an underlying £5,436mn in September, compared to £5,073mn in August and £5,192mn in September 2004. Mortgage lending accounted for £4,983mn of the rise, compared to August’s rise of £4,402mn. Within consumer credit, personal loans & overdrafts rose by £352mn compared to August’s £665mn, while net credit card lending rose by £108mn, much in line with the average over the previous six months (+£75mn).
Lending to financial firms
Lending to financial companies fell by an underlying £1,500mn in September mainly reflecting repayments by miscellaneous intermediaries (-£1,528mn).
Lending to non-financial firms
A rise in lending to real estate companies (+£1,722mn) was in line with the recent trend while lending to retail trade rose (+£636mn) and construction (+£177mn) while there were repayments by wholesale trade and garages (-£352mn) and hotels and restaurants (-£191mn).
