Following last week’s release of MBBG net lending figures for August, further information now available on lending to individuals shows that:
* Gross mortgage lending was £16.8bn in August. This was higher than July and 1% higher than in August 2004.
* Seasonally adjusted net mortgage lending (gross lending minus repayments and redemptions) rose by £4.3bn, compared with £3.7bn in July and £4.6bn in August 2004. This increase is in line with the average of £4.4bn over the previous six months.
* There were 194,476 mortgage approvals (for all purposes) in August, with a total value of £18.3bn. The number of approvals was 7% higher than July and only 2% weaker than August 2004. The average approval for house purchase was £130,500.
* Lending on loans and overdrafts rose by £0.8bn, having risen by £0.3bn in July, compared with an average increase of +£0.5bn in the previous six months. Credit cards recorded a net repayment (-£0.1bn) for the second time this year.
David Dooks, BBA director of statistics, said:
"Whilst August’s net mortgage lending remained in line with this year’s stable trend, the monthly amount of gross lending exceeded the corresponding month a year earlier for the first time in twelve months. Stronger remortgaging activity, representing 36% of all approvals, suggests that borrowers are shopping around for better deals and that gross lending will hold up in the coming months.
Within consumer credit, cards are generally not being used to increase debt. Card spending was offset by repayments in August, so that net lending continued to be subdued. Structured personal loans and overdrafts were stronger than of late and there may well be some switching between different forms of borrowing. It is worth noting, however, that overall trend growth in consumer credit is less than half the level this time last year."
Mortgage Lending
* August’s gross lending of £16,848mn was higher than July’s total of £16,042mn, and slightly higher (+1%) than £16,641mn in August 2004.
* Seasonally adjusted net mortgage lending rose by £4,274mn, compared with £3,741mn in July. The August rise was in line with the average of +£4,369mn in the previous six months leaving the annual growth rate just below 12%.
* Compared to the same month a year earlier, August’s approvals of house purchase loans were 9% higher by number and 26% higher by value; remortgaging loans were 1% higher by number and 18% higher by value; and equity withdrawal loans were 15% lower by number and also 5% lower by value.
Consumer Credit
* New borrowing on credit cards totalled £8,117mn in August. This was 13% higher than the previous month and repayments were also higher; however after seasonal adjustment the fall in net lending of £146mn compared with a recent average increase of +£102mn.
* New lending on personal loans and overdrafts was above the average for the previous six months, at £3,231mn and, after seasonal adjustment, there was a strong rise in net lending of £842mn.
