BBA: Mortgage lending up in April
According to the British Bankers’ Association (BBA), the number of mortgages approved for house purchases rose by 4% in April compared with the previous month, rising from 26,671 to 27,685 approvals.
However, compared with April 2008, this represented a fall of 15.5%.
Furthermore, net new mortgage lending (which takes into account repayments and redemptions) hit its lowest level in over eight years falling from £3.4 billion in March to £2.7 billion in April.
The BBA also said new personal loans (for purchases such as cars) made by the major UK banks was the same in April as it was in March at £1.5 billion – however, this represents a fall of almost 40% when compared with April 2008.
David Dooks, BBA’s statistics director, showed some optimism and said: “The house purchase part of the mortgage market appears to have stabilised, with slightly more approvals coming through, although April’s weak net mortgage lending reflects the lower number of approvals in previous months.“
Meanwhile Howard Archer, chief UK and European economist at IHS Global Insight, commented that the slight rise in April mortgage approvals suggests that activity in the housing market has very likely passed its worst point.
Finally, remortgaging was reported to be at its lowest level since December 1999 with the number of mortgage re-approvals at 25,418 in April. The figure suggests people who are coming off fixed-rate deals are opting to stay on the standard variable rate, due to historically low interest rates.