Banks’ gross mortgage lending up 5% in August

High street banks’ gross mortgage lending totalled £8.2bn in August, up 5% on the £7.8bn lent in July, according to statistics from the British Bankers’ Association.

This represents a 3% increase when compared to August 2010 and is 5% higher than the previous six-month average of £7.8bn.

There were 78,288 mortgage approvals worth £9.1bn in August, up 4% by number and 3% by value on July.

Of these, 35,226 approvals worth £5.2bn were for house purchase, up 4% by number on July and up 14% by number compared to August 2010.

In addition, the banks’ net mortgage lending was £0.7bn in August, down on £0.9bn in July, which is also the figure for the previous six-month average.

David Dooks, statistics director at the BBA, says: “The weak economic environment continues to undermine confidence in both household and business sectors, which impacts on borrowing demand.

“The banks’ new mortgage lending has ticked up in the past couple of months with higher buy-to-let demand, and some business sectors are edging towards year-on-year borrowing growth, although the general landscape is one of households not wanting to take on more borrowing and businesses waiting for trading conditions to improve before borrowing to expand or invest.”

He adds that against this economic backdrop, paying down debt continues to dominate the net lending figures.