May’s net lending up £5.8bn, says BBA

Net mortgage lending rose by an underlying £5.8bn in May, the latest figures from the British Bankers’ Association reveal.

This was higher than both the previous month’s £5.1bn, and the recent monthly average of £5.4bn.

Unsecured personal borrowing fell by £0.5bn in May, after having been unchanged in April.

Underlying credit card borrowing fell by £0.4bn, while loans and overdrafts fell by £0.1bn

Total sterling lending to the UK private sector rose by an underlying £18.7bn net to £1,321bn.

This compares with an underlying rise of £9.6bn in April and an average of rise of £11.2bn over the previous six months.

There was a strong rise in lending to real estate companies, up by £1.8bn and also increases in lending to construction, hotels and restaurants and manufacturing, which waspartially offset by a decline in lending to wholesale and retail trade.

Deposits from the private sector rose by £10bn to £988bn.

Personal deposits increased by £4.0bn, which was stronger than the recent average monthly growth of £2.9bn.

David Dooks, director of statistics at the BBA, says: “The recent trend in mortgage lending had been downward, so the stronger demand in May was somewhat surprising, particularly as it was before the anticipated introduction of Home Information Packs, which encouraged people to put their properties onto the market in May and will tend to boost lending in June and July.

“HIPs may well distort mortgage data in the short-term, but this effect should smooth out with the phased introduction now planned.

“People still seem to be managing their finances soundly, with borrowing on plastic cards falling for 10 out of the last 12 months and personal deposits rising by more than the recent average.”