Mortgage lending fell in June

Category: Mortgages
Date: 7/23/2010

Mortgage lending by UK banks fell during June, although levels are still up on where they were 12 months ago.

Figures from the British Bankers' Association (BBA) show that 34,813 mortgages were approved for house purchases in the month, down from 36,418 in May and the previous six month average of 37,027.

The value of net lending in June increased by £2.1 billion, down from £2.5 billion in May and £2.9 billion in June 2009.

"The banks' mortgage lending position was little changed in June," commented David Dooks, statistics director at the BBA.

"The abolition of HIPs and a reported increase in the number of house sellers is expected to encourage activity in the market, thought this may be tempered by households' uncertainty over job prospects and the impact of fiscal tightening."

Overall, net mortgage lending – taking in remortgaging and equity withdrawal/other purposes – was up by 4.4% on June 2009, a marked improvement on the 1.1% annual climb registered in May.

The average value of house purchase approvals was £150,600, unchanged from last month and 9% higher than a year ago.

The number of approvals given by banks for remortgaging and equity withdrawal purposes was similar to that seen in May and the previous six month average.

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BBA figures also gave further insight into the prudent approach consumers are taking on credit.

New credit card lending rose slightly, but consumers paid back more than £300 million more than they borrowed on loans and overdrafts in the month.

Lending for personal loans fell by almost a fifth (19%) in June.

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