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Banks’ gross mortgage lending up 12% year-on-year in December

Gross mortgage lending by high street banks totalled £9bn in December 2011, 12% higher than the same period in 2010.

Figures from the British Bankers’ Association show this also marks a 7% increase on the £8.4bn lent in November 2011 and is 10% higher than the previous six-month average of £8.2bn.

Net mortgage lending totalled £0.7bn in December 2011, up from £0.5bn the previous month but lower than the previous six-month average of £0.8bn.

There were 73,382 mortgage approvals worth £8.7bn in December, up from 72,335 approvals worth £8.4bn the previous month.

For house purchase, there were 36,171 approvals worth £5.3bn in December, up from 34,809 approvals worth £5.1bn in November.

David Dooks, statistics director at the BBA, says the 12% year-on-year rise in gross lending in December makes it the strongest month of the year.

But he says: “However, at the same time, the household sector generally is focusing on debt repayment amid inflated household expenses and a continuing air of uncertainty, so we see a reluctance to let net borrowing rise, with people preferring to use their bank account cash for expenditure.

“Business prospects are even more attuned to the state of the economy in the UK and in overseas trading markets, with borrowing intentions for growth or investment plans generally staying on the back-burner.”



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