Gross mortgage lending of £7.9bn in February was slightly lower than the recent six month average of £8bn and 8% lower than gross lending in February 2010.
Despite gross mortgage lending holding up fairly well recently, this is due to stronger remortgage activity rather than new house purchases. Net mortgage lending increased by £1.3bn in February.
Commenting, BBA statistics director, David Dooks said: "Mortgage lending remains subdued, with only remortgaging on an upward trend, as borrowers lock into lower rate products currently available. Household demand for unsecured credit is also weak, as people continue to cut back on borrowing and build up deposits.”
John Mawdsley, chief executive officer of Omnii Solutions, said, “It’s not all bad news today. It looks as if the lending market has established a solid base from which to operate, despite the economic storm clouds that are casting such a long shadow in the run up to the budget announcement. Household finances may have been ransacked by inflation, and a lack of high LTVs continue to pin first-time buyers to the rental market, but the purse-strings are beginning to loosen and that is good news for brokers.
“In the long term there will be little to cheer about until the weak macro economic foundations underpinning the mortgage market begin to show signs of recovery. Only time will tell whether the Chancellor’s growth strategy is little more than empty rhetoric.”
