Bank of England reports static mortgage lending

Bank of England reports static mortgage lending

52,854 mortgage loans were agreed in principle in November according to the latest figures from the Bank of England, just 68 higher than the previous month.

Although mortgage lending in November 2011 was 12% higher than in November 2010, there has been no significant improvement for four months.

Mortgage approvals remain at half their 2007 level, before the onset of the banking crisis.

Since the recession many first time buyers have been unable to raise the deposits demanded by lenders, which can be as high as 25 per cent.

With household incomes under pressure from high levels of unemployment and inflation the outlook for the housing market remains weak with house prices expected to fall by up to 10 per cent.

The number of approvals for remortgaging also fell in November to 31,154, compared with an average of 32,448 for the previous six months.

In contrast, mortgage lending by building societies and mutuals increased to £2.5 billion in November 2011 compared with £2 billion in November 2010.

Gross mortgage lending in the first 11 months of 2011 grew by 16% to £21.5 billion compared with £18.6 billion in the first 11 months of 2010.

This represents the highest level of gross mortgage lending since Building Societies Association (BSA) started reporting on the current basis in January 2010.

Adrian Coles, director-general of the BSA, said: “Mutuals have shown their resilience in the face of tough market conditions over the past year and have continued to see their new mortgage lending increase.

“Mutuals lent 16% more from January to November 2011 compared to the same period in 2010, whilst lending across the mortgage market as a whole has remained broadly flat”.

“These are encouraging trends against rather discouraging developments in the wider economy”, he continued.

Tags: , ,

Comments (0)

Trackback URL | Comments RSS Feed

There are no comments yet. Why not be the first to speak your mind.

Leave a Reply

Visited 3051 times, 3 so far today