However, the latest results were still 3.3% higher than in August 2003. After seasonal adjustment, the rise in net lending, gross lending minus repayments, of £4.4bn was the weakest growth since June 2002 and notably lower than the average of £5.6bn for the previous six months.
There were 201,700 loans approved in August, with a total value of £15.3bn. Approval numbers were 4.1% down on July and 15.1% weaker than August 2003. In particular, the number of loans approved for house purchase was 9.5% lower than July and 21.6% lower than August 2003 and they represented a lower proportion of all approvals than in July. The average approval for house purchase fell slightly, to £112,100.
Growth in overall net consumer credit was stronger than in July, rising by £1.2bn, seasonally adjusted, the largest increase since March. Credit card borrowing was stronger than in July, growing by £0.6bn, whilst demand for personal loans and overdrafts, rose by £0.6bn, slightly
above the average over the previous six months.
David Dooks, British Bankers' Association director of statistics, says: “The slowing down of net mortgage lending in August looks set to continue in the next couple of months. A further weakening in the numbers of loans approved, particularly for house purchase and equity withdrawal in August indicates that households' appetite for secured borrowing is moderating.
“However, consumer credit growth in August was stronger than in July, with card borrowing in line with relatively robust retail sales.”
August's gross lending of £16,610m was 8.1% lower than July's total and compared with £16,074mn in August 2003.
After declining slightly in July the growth in net mortgage lending slowed further in August. The seasonally adjusted rise was £4,404mn, well down on the average of +£5,557m over the previous six months.
Compared to the same month a year earlier, August's approvals of house purchase loans were 22% lower by number and 16% lower by value; remortgaging loans were 6% lower by number and 1% lower by value; and equity withdrawal loans were 17% lower by both number and value.
New borrowing on credit cards totalled £8,074m in August. This was similar to both June and July though some 4.3% stronger than the average of the previous six months. Although repayments were also higher than average, the seasonally adjusted increase in net lending, of £582mn, was stronger than both July and the recent average.
New lending on personal loans and overdrafts, at £3,435m, was above the average for the previous six months. After seasonal adjustment, the rise in net lending was £611m, higher than the average rise of £513m over the previous six months, though following a weak figure in July.