House purchase loans show further rise
The British Bankers’ Association (BBA) has published its latest mortgage lending statistics showing that in May, the number of loans approved for house purchases rose to 31,162.
The figure is up from 29,018 in April and sports an increase of 15.8% on May 2008.
However, gross lending fell to £7.7 billion last month, a figure last seen in February 2001 and down 50.7% on the same period of 2008.
The decline reflects the trend for homeowners coming off fixed rates to opt for lenders’ standard variable rates (SRVs).
In some cases SVRs are proving attractive and in others borrowers revert to SVRs because they are unable to meet tighter lending criteria, particularly demands for higher deposits.
During the month, BBA members lent an addition £2.3 billion; the figure reflects the weakest monthly rise in net lending (gross lending with repayment and redemptions stripped out) since early 2001 and is well below the previous six month average of £3.2 billion.
Commenting on the data, BBA’s statistics director, David Dooks, says:
“Steady monthly increases since last November have seen the number of loans approved for house purchase recover to levels seen in early 2008, although gross and net mortgage lending show a subdued wider mortgage picture.”
He adds: “Unlike much of the mortgage market, the High Street banks are still seeing lending growth and improved mortgage availability is reflected in higher average loan approval values.”