Mortgage lending has fallen to its lowest level in a decade.
The British Bankers’ Association has reported that gross mortgage lending of £8 billion in September was 10.8% lower than a year ago.
Net mortgage lending increased by £1.6 billion in September compared to £2.9 billion in the same month in 2009 as repayments continued to hold up at fairly strong levels.
House purchase approvals continued to weaken in September reflecting low demand. The average value of house purchase approvals (£142,900) fell again in September but was still some 4.1% higher than a year ago. Numbers of approvals for remortgaging have been slightly stronger in the last three months while those for equity withdrawal have fallen back slightly.
Numbers of credit card purchases rose slightly in September to just above the six-month average but<span class="Apple-tab-span" style="white-space:pre"> </span>generally continued to be weak in line with little growth in retail sale volumes. Repayment levels are holding up and more than matching new spending levels, so the stable growth in card borrowing largely reflects interest accruing. Demand for personal loans continued to be weak in September with new borrowing some 7% lower than last year.
BBA statistics director, David Dooks said: “Subdued mortgage activity and little demand for unsecured credit are a reflection of household uncertainties ahead of this week’s Spending Review. Demand for new mortgages remains low despite more properties on the market and falling house prices.