Banks’ gross mortgage lending down 8% year-on-year
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High street banks have reported gross mortgage lending of £7.6bn in July, 8% lower than the £8.3bn of lending in July 2010.
On a monthly basis, gross mortgage lending remained largely stable compared to June.
However, the number of remortgage approvals in July was higher than in June and 14% higher than July 2010.
The BBA says reports suggest that remortgaging may have been stimulated by some growth in the buy-to-let market.
House purchase approvals were also higher than in June and slightly higher than in July 2010.
There were 74,590 mortgage approvals in July, up from 71,521 in June.
With repayments continuing at a fairly high level, net mortgage lending increased by just £0.9bn in July, while the annual growth of the banks’ net mortgage lending was 1.7% in July, remaining ahead of the 0.7% for the whole mortgage market in June.
Chris Gardner, director of Obligo, says gross lending may be down on last year, but the market should not complain.
He says: “Not so long ago people were predicting Armageddon in the mortgage market and so flat is fairly positive.”
Gardner says the fact that remortgages are up reflects the exceptionally competitive deals in the market more than the threat of interest rate rises.
He adds: “People are aware that the mortgage market could rapidly turn against them in the current climate and so are remortgaging now while rates are so favourable.
“Some of the two and five-year fixed rates on the market right now are too hard to resist.”
David Dooks, statistics director at the BBA, says: “The high street banks have provided almost three-quarters of all new mortgage lending during the last two years when the mortgage market has been very subdued.”
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