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December strongest month for mortgage lending

December strongest month for mortgage lending

Category: Mortgages

Updated: 25/01/2012
First Published: 25/01/2012

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December was the strongest month in the whole of 2011 for mortgage lending, new figures have revealed.

Some £9 billion worth of gross mortgage lending was conducted in the month, the highest monthly figure seen throughout the course of the year, the British Bankers' Association (BBA) said.

It was up on November's £8.4 billion and the previous six-month average of £8.2 billion.

The BBA's statistics director, David Dooks, also pointed out that the month's total was up by 12% compared with December 2010.

During the month, 36,171 approvals were passed for house purchases, also up compared with the previous month and the average for the prior six months.

It continued a trend seen during the second half of the year in which there was an upturn in house purchase approvals, leading to stronger mortgage lending.

Despite this, homeowners remain keen to pay down their mortgages, with repayment levels meaning that net mortgage lending increased by only £0.7 billion last month.

The BBA revealed that the average value of a mortgage in 2011 was £145,200, slightly down from 2010 when it was £146,400.

While mortgage lending was given a boost, people are reluctant to consider other types of borrowing, with figures showing repayments continue to match borrowing.

The Christmas period saw spending on credit cards rise slightly to £7.2 billion, but people paid back even more at £7.4 billion.

"The household sector generally is focusing on debt repayment amid inflated household expenses and a continuing air of uncertainty, so we see a reluctance to let net borrowing rise, with people preferring to use their bank account cash for expenditure," said Mr Dooks.

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