Figures from the British Banker’s Association show October’s gross mortgage lending was was £18.9bn, some 6% higher than September’s figure and 8% higher than the £17.5bn in October last year, although this annual growth largely reflects the growth of property prices.
Underlying net mortgage lending, gross lending minus repayments and redemptions rose by £5.5bn, compared with £5.4bn in September, £4.7bn in October 2005 and an average of £5.5bn over recent months.
There were 198,242 mortgage approvals, for all purposes in October, with an aggregate value of £21.8bn. This number of approvals was 2.3% higher than in October 2005 and their value was 15.5% higher. The average loan approved for house purchase was £144,200, some 11% higher than a year earlier.
Net lending on loans and overdrafts rose by £0.8bn in October, compared with an increase of £0.3bn in September and an average rise over the previous six months of +£0.4bn. In contrast, underlying net lending on credit cards fell by £0.4bn, compared with a fall of £0.2bn in September and with an average monthly contraction of £0.2bn over recent months.
David Dooks, BBA director of statistics, says: “The secured lending market undoubtedly remains robust, but after discounting price growth, lending volumes are not dissimilar to the same time last year. October’s loan approvals were boosted by remortgaging, as customers look to fix or reduce their mortgage costs, but this activity, with customers changing their lender, has no significant effect on net lending marketwide.
?”Credit card lending continues to contract, with relatively lower spending levels this year, being exceeded by repayments in most months so far.”
The October increase of £5,531mn in seasonally adjusted net lending raises the annualised rate of growth to 13.7%.
Compared to the same month a year earlier, October’s loan approvals for house purchase were 4% higher by number and 15% higher by value. Remortgaging approvals were 6% higher by number and 17% higher by value; whilst approvals for equity withdrawal were 4% lower by number but 4% higher by value.