Mortgage lending well down year-on-year - Mortgages - News - Moneyfacts


Mortgage lending well down year-on-year

Mortgage lending well down year-on-year

Category: Mortgages

Updated: 23/12/2010
First Published: 23/12/2010

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Mortgage lending fell once more in November, taking levels to a more than year low, figures from the British Bankers' Association (BBA) have shown.

Just 29,991 loans were approved for house purchase in the month, the smallest number for 20 months.

It represents a fall from 30,689 in October and a significant drop from the previous six month average.

Net mortgage lending – which strips away mortgage repayments – increased by only £1.5 billion in November, the lowest rise since August 1999, and down from a figure of £3.4 billion in the same month last year.

The average value of a loan for a house purchase in November was £145,000.

Remortgaging levels fared better, with the number of loans agreed for remortgaging rising to 27,045, up from 24,785 in October and the previous six month average of 23,345.

Commenting on the figures, David Dooks, statistics director for the BBA, said: "Remortgaging with banks was strong in November as borrowers chose to replace maturing fixed term mortgages."

It is the latest in a growing list of evidence that suggests the housing market has slumped in the second half of the year, as buyers hold out in the hope of price declines, while sellers have remained resolute, opting not to entertain lower offers.

The supply demand imbalance has also levelled out, meaning prices are not being artificially held up because of a lack of stock.

Despite this, property experts and analysts have not forecast large scale falls in prices next year, with only a slight fall more likely.

Other figures from the BBA show that Britons are making concerted efforts to pay down their loan and credit card debt.

Consumers paid off some £6.3 billion from their credit cards in the month, spending just £5.9 billion, while the outstanding debt on all loans in the UK fell as well.

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