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 £17.8bn in September. This was the highest monthly total since July 2004 and 6% higher than August. Over the third quarter, gross lending was £50.7bn compared with £51.1bn in the same quarter of 2004.
- Seasonally adjusted net mortgage lending (gross lending minus repayments and redemptions) rose by £4.9bn, compared with £4.4bn in both August 2005 and in September 2004. This was the highest increase of the year and above the average of £4.4bn over the previous six months.
- There were 199,031 mortgage approvals (for all purposes) in September, with a total value of £19.0bn. The number of approvals was 2% higher than both August 2005 and September 2004. The average approval for house purchase remained at £130,500.
- Net lending on loans and overdrafts rose by £0.4bn, having risen by £0.7bn in August, in line with the average increase over the previous six months. Net Lending on credit cards rose by £0.1bn, also in line with the average increase of £0.1bn in the previous six months.
David Dooks, BBA director of statistics, said:
"September’s upturn in both gross and net mortgage lending possibly reflects a delay of the demand normally seen in the late Summer, but there is also a stimulus from remortgaging. Two-year fixed rate loans taken during the buoyant period of 2003 are maturing around now and borrowers are seeking out new options.
The outlook for consumer borrowing remains subdued, with card usage modest in comparison with previous years."
Mortgage Lending
- September’s gross lending of £17,817mn was 5.7% higher than August’s total of £16,848mn, and 9.3% higher than the £16,304mn in September 2004.
- Seasonally adjusted net mortgage lending rose by £4,899mn, compared with £4,393mn in August. The September rise was stronger than the average of +£4,364mn in the previous six months, producing an annual growth rate just below 12%.
- Compared to the same month a year earlier, September’s approvals of house purchase loans were 17% higher by number and 37% higher by value; remortgaging loans were 3% higher by number and 23% higher by value; and equity withdrawal loans were 13% lower by number and 5% lower by value.
Consumer Credit
- New borrowing on credit cards totalled £7,453mn in September. This was 8% lower than the previous month and repayments were also lower; however after seasonal adjustment the increase in net lending of £108mn compared with a recent average increase of +£75mn.
- New lending on personal loans and overdrafts was slightly down on the average for the previous six months, at £2,747mn, but after seasonal adjustment, there was a rise in net lending of £352mn.
