This was £0.6bn lower than April and partly reflects the relatively lower approval volumes seen in April. After seasonal adjustment, there was a rise in net lending of £4.9bn, the weakest increase since November 2003.
* Approvals in May were 5% stronger than the relatively weak figure seen in April. There were 222,000 loans approved in May, with a total value of £18.0bn. The proportion of loans approved for house purchase, at 40%, was the highest since July 2002, though this also reflected reduced remortgaging and equity withdrawal approvals. The average approval for house purchase rose again, to £115,400.
* After data revisions, growth in overall net consumer credit was weaker than in April, rising by £0.9bn (seasonally adjusted). Credit card borrowing was not as strong as in April, growing by £0.5bn, whilst demand for personal loans and overdrafts was again quite subdued.
David Dooks, BBA director of statistics, said:
"May’s data present conflicting messages about the mortgage market. Whilst growth in both gross and net mortgage lending was not as strong as in April, loan approvals, particularly for house purchase and for fixed rate products, saw stronger outturns, suggesting that lending data will hold up in the coming months. If there are signs of moderating mortgage demand, they come from weaker remortgaging and equity withdrawal approvals in the last couple of months, but the housing market appears to be remaining robust.
Overall consumer credit did not grow in May by as much as in April. Though still relatively strong, card borrowing was weaker than April’s high, whilst demand for personal loans was again modest."
