Following last week’s release of MBBG net lending figures for September, further information now available on lending to individuals shows that:
* Gross mortgage lending was £16.3bn in September. This was £0.3bn lower than August, and 3.8% lower than in September 2003 – the first year-on-year fall since November 2000.
* Net lending (gross lending minus repayments) was inflated by intra-company accounting within one group. After allowing for this, the underlying seasonally adjusted rise of around £4.4bn was very similar to August, reflecting little change in demand.
* There were 195,100 loans approved in September, with a total value of £15.0bn. Approval numbers were 3.3% down on August and 21.8% weaker than September 2003. In particular, the number of loans approved for house purchase was 6.4% lower than August and 28.8% lower than September 2003 and they represented a slightly lower proportion (31%) of all approvals than in August (32%). The average approval for house purchase fell for the third successive month, to £111,100.
* Growth in overall net consumer credit (£0.8bn, seasonally adjusted) was weaker than in August, reflecting slower growth in credit card borrowing (+£0.3bn), whilst demand for personal loans and overdrafts, rose in line with the previous six months’ average.
David Dooks, BBA director of statistics, said: "Within mortgage lending, gross lending was, unusually, lower than for the same month a year earlier, while the underlying rise in net mortgage lending repeated August’s rise. Net approvals for house purchase continued to slow, so consequently it would seem likely that underlying net mortgage lending will continue to be relatively weaker in the next few months.
After a period of stronger net credit card lending, September saw slower growth, in line with the reported slowdown in retail sales over the third quarter."
Mortgage Lending
* September’s gross lending of £16,273mn was 2.0% lower than August’s total and compared with £16,917mn in September 2003.
* In nominal terms, mortgage lending rose by £5,387mn. Though this was some £997mn stronger than the previous month, that reflected intra-company accounting within one group.
* Compared to the same month a year earlier, September’s approvals of house purchase loans were 29% lower by number and 26% lower by value; remortgaging loans were 9% lower by number and 3% lower by value; and equity withdrawal loans were 26% lower by number and 24% lower by value.
Consumer Credit
* New borrowing on credit cards totalled £7,751mn in September. This was lower than August and some 4.7% weaker than the average of the previous six months. Also repayments were higher than average and the seasonally adjusted increase in net lending, of £286mn, was well down on both August and the recent average.
* New lending on personal loans and overdrafts, at £3,157mn, was slightly down on the average for the previous six months. After seasonal adjustment, the rise in net lending was £552mn, in line with the average rise of £558mn over the previous six months.
