BBA says mortgage lending slowed in December

The UK mortgage market experienced a slowdown in December, with lending falling significantly from its record level of the month before, figures released by the British Bankers&#39 Association revealed.

The BBA, which published its monthly report on lending by the major British banks yesterday, says that mortgage lending stood at £5.08bn in December, down from £5.8bn in November and £5.6bn in October. CML figures also showed a slight decrease in lending over December.

Steven Pitkeathley, executive director of the BBA, says: “Whether slower mortgage growth in December was because homebuyers were backing away from current property prices or whether equity withdrawal is moderating remains to be seen. One month&#39s figures cannot be viewed reliably as a trend change.”

Elsewhere in the lending figures, borrowing on credit cards during December remained in line with previous months, increasing by £306m. However, other unsecured lending, including personal loans and overdrafts, soared by £851m – although the severity of this rise was mitigated somewhat by the fact that it followed November&#39s rise of just £382m, the smallest since September 2000.

Pitkeathley adds: “It seems that in spite of some predictions, consumer borrowing, particularly on cards, didn&#39t go overboard at Christmas, with people preferring to use cash or deposits for spending.”