December's gross mortgage lending total of £13bn was weaker seasonally than previous months in the second half of 2002, but still some 40% more than a year earlier, the British Banker's Association has revealed.
Net lending, taking redemptions and repayments into account, rose by £56.4bn in the year (46% more than in 2001), increasing the total level of mortgage debt outstanding to £426.9bn.
Compared to December 2001, there were 4% fewer loans approved for house purchase, 34% more remortgages and 34% more equity withdrawal loans.
The BBA says the relatively low numbers of mortgage loans approved in December (174,400) signifies the start of the usual subdued picture over the winter months. Within this seasonally weaker total, there were fewer loans approved for house purchase than in December 2001, whilst a sharp fall in their average value, to £87,600, left it only 9% higher than a year earlier.
Ian Mullen, BBA chief executive, says: “2002 was the strongest year ever for mortgage lending, with equity withdrawal being a significant driving force. However, there were fewer loans approved for house purchase in December than in the same month a year earlier and, as the average value also fell sharply, we may be seeing some signs of a correction coming through to a housing market that has seen extraordinary price growth.”