Decline in July mortgage lending

The British Bankers’ Association (BBA) has published figures showing a slight decline in mortgage lending, during July.

The BBA reported 66,695 approvals for house purchases during the month, a figure down from 75,318 in June, and at its lowest in three months.

However, taking a seasonal view, the numbers were only slightly behind the 67,412 approvals for purchases in July of 2006. This suggests that the decline is seasonal, rather than due to rising interest rates.

In total, 182,950 mortgages were approved over the month, with the number of remortgage approvals reaching 68,814.

The total amount lent for all mortgages during July 2007 stood at £21.5 billion; approvals for house purchases amounted to £10.5 billion.

According to the BBA, remortgaging activity boosted the lending figures for this July.

The average amount borrowed by house buyers was 13% higher than in July 2006, at £156,900 and this increase is ahead of the 11.2% annual rise in house prices, as calculated by Halifax.

Finally, the BBA’s July 2007 data on unsecured borrowing shows a £0.2 billion increase in the value of personal loans and overdrafts.

Spending on credit cards also increased 8% as compared with July 2006, to £7.6 billion, but once repayment and seasonal adjustments are taken into account, net lending actually reduced by £82 million.

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