May’s gross mortgage lending of £19.7bn was 8% more than in May 2006. Though the highest level of new business since November, partly reflecting strong re-mortgaging activity, it follows the usual yearly pattern of stronger lending going into the summer months.
There were 204,800 mortgages approved (for all purposes) in May; just 2% more than in May 2006, with an aggregate value of £24.2bn. The average loan approved for house purchase was £157,100, some 13% higher than a year earlier.
Underlying net mortgage lending (gross lending minus repayments and redemptions) rose by £5.8bn, well up both on April’s increase (£5.1bn) and the recent average of £5.4bn. The annual growth in net mortgage lending continued to stay around 14%.
Unsecured personal borrowing fell in May.
Credit card borrowing fell by £0.4bn (net) in the month, while borrowings on personal loans and overdrafts also fell, by £0.1bn.
David Dooks, BBA director of statistics, said:
“Contrary to the recent stable trend, the banks’ gross and net mortgage lending strengthened in May, reflecting an improved competitive position, rather than a general rise in mortgage demand across the market. And, because of strong approvals in May, the banks’ higher market share is likely to continue over the next couple of months.
Although retail sales have grown recently, credit card borrowing continues to slow down as consumers prefer to pay up front rather than borrowing to spend.”
Mortgage Lending
When compared to May 2006, house purchase approvals were down 4% by number but up 9% by value; remortgaging approvals were up 13% by number and 25% by value; while approvals for equity withdrawal were down 3% by number but 6% higher by value.
Consumer Credit
Spending on credit cards totalled £7,418mn in May; 3.4% less than in May 2006. After allowing for repayments and seasonal adjustment, underlying net lending decreased by £409mn.
New lending on personal loans and overdrafts in May was 9% less than in May 2006 and after seasonal adjustment, loan and overdraft lending fell by £54mn net.
