Consumer lending continued at a runaway pace last month with a record rise in mortgage lending.
Net mortgage lending increased £5.6bn to £420.9bn in October, with a revised net increase of £0.9bn in other consumer lending to £88.3bn.
October's gross mortgage lending totalled £14.6bn, reflecting around 70% of new lending by all lenders. October's total was a record, following a slightly lower figure in September. While remortgaging loans are roughly offset by redemptions, equity withdrawal is not, so a seasonally adjusted increase in net lending of £5.6bn resulted.
This was the highest monthly rise yet, exceeding the previous record of +£5.2bn seen in May. A total of 243,000 mortgage loans were approved in October for £15.9bn, with strong demand for remortgaging and equity withdrawal loans, whilst house purchase saw an up-turn from the last two months.
The average value of house purchase loans, £89,400, was 18% higher than a year ago.
Meanwhile, demand for structured loans and overdraft borrowing (+£0.6bn) was less than in the previous month, with credit card borrowing (+£0.2bn) in line with recent trends.
BBA executive director Simon Pitkeathley says: “October's figures show people withdrawing the equity in their homes to fund large purchases through their mortgages rather than taking out structured loans. As a further alternative to loans, people are also choosing to carry debt on credit cards, where low, short-term rates are often used by cardholders wishing to minimise their borrowing costs.”