Following last week's MBBG lending figures released by the BBA, further information now available helps explain July's rise in net mortgage lending of £4.7bn to £405.9bn and the net increase of £0.9bn in other consumer lending to £85.2bn.
o July's gross mortgage lending reached a record £14.5bn, following the lower Jubilee-affected total in June. However, repayments were also at a record level, so that net lending was below May's record increase.
o 237,500 mortgage loans were approved in July for a total of £15.4bn, 16% and 14% more respectively, than in June. Within the total, the value of loans approved for re-mortgaging and equity withdrawal both reached new record levels. The average loan value of £88,800 was 2% lower than in June, but 14% higher than a year ago.
o July's growth in unsecured borrowing was slightly down on the recent trend, as record gross lending on credit cards and through structured loans was matched by the highest level of repayments yet seen.
Ian Mullen, BBA chief executive, says: “At first glance, July's figures appear very strong, but allowing for the effect of the Jubilee holiday in June and assessing the two months together, it suggests that demand, though buoyant, is not continuing to escalate from the peak seen in May.
Strong levels of new personal borrowing on cards and loans were matched by repayments and the signs are that people are still borrowing within their means.”