Mortgage lending continues its rise

Net mortgage lending rose by £4.8bn to £415.1bn in September, with an additional net increase of £1.1bn in other consumer lending to £88bn, according to new lending figures released by the British Bankers&#39 Association.

September&#39s gross mortgage lending totalled £13.1bn. Although this was 8% lower than in August, it was 34% higher than in September 2001. Repayments of £8.3bn were 4% down on the previous month, although 38% higher than in September last year. The underlying seasonally adjusted increase of £4.8bn in net lending was the second highest monthly rise, yet slightly below the record +£5.2bn seen in May.

A total of 212,600 mortgage loans were approved in September for a total of £13.8bn. The value was 3% higher than in August, while the number was virtually unchanged. The average loan value for house purchase fell for the third month in a row, to £86,900, though this was 14% higher than a year ago.

BBA executive director Simon Pitkeathley says: “Only half the amount of loans approved in September were for house purchase. This is a continuation of a trend we have seen for sometime now. It would seem that increasing numbers of homeowners are seeking better deals on their existing loans.

“They may also be choosing to build extensions rather than moving to a bigger property. This could be a reflection of a continuing resistance to paying the current going rate for property.

“Continued credit card borrowing and loan demand for new cars contributed to the increase in other consumer lending. As repayments remain robust, there is every indication that consumers are in control of their finances.”