New mortgage lending up in January

The British Bankers’ Association (BBA) has reported a slight rise in the number of mortgages approved by its members for house purchases, in January.

By volume, approvals rose to 23,376, compared to 22,416 in December, however, the figure was still 43% down on a year earlier.

According to the BBA, High Street banks are currently providing more than two-thirds of new mortgage lending and January’s figures show that demand is being “underpinned” by lower borrowing costs and falling property prices.

Meanwhile, the value of January’s net mortgage lending (gross lending minus repayments and redemptions) fell to £2.9 billion, its second lowest level since April 2001 and down nearly 50% year-on-year.

Total mortgage advances for January held steady on a month earlier, at £9.9 billion and remortgaging volumes rose slightly but were still 60% fewer than in January 2008.

The figure for remortgagers reflects the fact that many homeowners are sticking with their lenders’ standard variable rates (SVRs) when fixed-rate deals end.

Some have insufficient equity in their properties to apply for today’s best rates and for others, interest rate cuts have meant that lenders’ SVR are a relatively attractive proposition.

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