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BBA reports increase in net mortgage lending

The British Bankers Association has seen an increase in net mortgage approvals between January and February.

There were 28,179 mortgages approved for house purchase in February, up from 24,278 in January but still down 31% on a year earlier.

This represents an increase of £3.9bn by the major banks in February, up from £3.4bn in January.

However gross mortgage lending fell to £9.2bn, its lowest since June 2001.

The figures also showed a slight improvement in the number of home purchase loans approved, up from £2.9bn in January to £3.5bn in February.
While the total number of mortgages approved reached £7.8bn, up from £7.6bn.

The BBA says February’s approval activity, both in volume and value, was marginally above January, but continues to be at a very low level.

Remortgaging approvals declined slightly as borrowers reverted to
standard variable rates rather than moving to new fixed rate products.

David Dooks, statistics director at the BBA, says: “Most new mortgage lending is being done by the high street banks but demand is, of course, being moderated by the impacts of the recession.

“Remortgaging activity has slowed in recent months, while higher numbers of loans approved for house purchase simply reflect the banks’ greater market share. In the wider consumer market, unsecured credit is very subdued and individuals’ deposits are also weak, as people respond to the current interest rate climate.

“Within company financing, consumer-facing sectors were the only significant borrowers in February.”

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