Gross mortgage lending drops to £8.6bn in June

23 July 2010 | By Samuel Dale

Its monthly statistics show that in May gross mortgage lending stood at £8.9bn while the six month average is £9bn.

And an increase in net mortgage lending of £2.1bn last month was still below the £2.5bn average over the last six months.

But bank mortgage lending grew 4.1% in May, year on year, compared to 1.1% in the whole mortgage market.

The number of mortgage approvals remained steady at 75,195, dropping from 76,910 in May.

David Dooks, BBA statistics director, says: “The banks’ mortgage lending position was little changed in June. The abolition of Home Information Packs and a reported increase in the number of house sellers is expected to encourage activity in the market, though this may be tempered by households’ uncertainty over job prospects and the impacts of fiscal tightening.

“Overall lending to business continued to reflect subdued demand, and contraction in lending to most non-financial sectors slowed.”

The number of houses on the market declined in June but the BBA still expects the abolition of HIPs to have a positive impact.

The average value of house purchase approvals remained unchanged on £150,600 but 9% higher than last year.

Remortgages and equity withdrawal approvals are at similar levels to May and the previous six months average.

Repayment levels are holding up and more than matching new spending levels.

But demand for personal loans fell in June with new lending some 19% lower than a year ago.

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