MBBG figures show rise in mortgage lending

Latest figures for October 2005 from the Major British Banking Groups show that net mortgage lending in October rose by an underlying 4.3bn.

This was lower both than Septembers rise of +4.7bn and the average of +4.4bn over the previous six months.

Underlying growth in overall unsecured personal lending was higher than both September and the average of the previous six months.

Of this, loans & overdrafts rose by 0.4bn in line with the recent average whilst credit card borrowing rose by 0.2bn.

Total sterling lending to the UK private sector showed a net underlying increase of 8.7bn to 1,138bn.

This was stronger than the previous months underlying rise of 6.4bn but slightly lower than the average of +8.8bn over the previous six months.

Lending to real estate companies was once again the largest component of lending to non-financial companies, rising by 1.3bn.

Deposits from the private sector rose by 8.6bn to 809bn. Personal deposits recorded the weakest increase this year of 0.7bn.

David Dooks, BBA director of statistics, says: “Whilst Octobers underlying net mortgage lending was slightly weaker than September, the monthly trend averages around 4.4bn as it has done throughout 2005. This reflects the steady state of a mortgage market which shows little prospect of concerted movement either upwards or downwards in the near term.

A small increase in credit card borrowing was consistent with a slight upturn in retail sales, but overall, consumers demand for credit continues to be cautious, while deposit growth was weaker than of late.”

Net lending rose by an underlying 4,916mn in October compared to 5,162mn in September and 4,854mn in October 2004. Mortgage lending accounted for 4,251mn of the rise compared to Septembers rise of 4,714mn.

Within consumer credit, personal loans ands overdrafts rose by 437mn compared to Septembers 274mn while net credit card lending rose by 243mn, stronger than both September and the average over the previous six months (+98mn).

Lending to financial companies rose by 1,177mn in October mainly reflecting increased borrowing by miscellaneous intermediaries offset by repayments in other sectors.