Gross mortgage lending stable at £12.2bn, BoE
Within total lending, lending secured on dwellings rose by £600m in May, compared to the previous six month average growth of £1bn, Bank of England statistics have shown.
Gross lending secured on dwellings was £12.2bn in May compared to the previous six-month average of £12.4bn, the Lending to individuals data revealed. Repayments in May were £11.7bn, compared to the previous six-month average of £11.6bn.
The number of loan approvals for house purchase was 51,098, falling slightly in May and lower than the previous six-month average of 52,812.
The number of approvals for remortgaging decreased in May to 29,244, and was slightly lower than the previous six-month average of 30,445.
Approval figures for other purposes were also slightly depressed in May at 18,079, lower than the previous six-month average of 19,531.
Paul Diggle, property economist at Capital Economics, blamed the decline in mortgage approvals purely on lenders reducing the availability of mortgage credit.
He said: “Against a backdrop of renewed recession in the UK and the escalating crisis in the euro-zone, mortgage approvals are unlikely to break out of their rut anytime soon.”
However, Mr Diggle pointed out that the Bank of England’s Credit conditions survey revealed that demand for mortgage lending actually rose in the second quarter overall.
He said: “But that may not be sustained in the face of weak consumer confidence. In any case, the fact that lenders tightened the availability of mortgage credit for the first time since late-2009 in Q2 suggests that a significant improvement in mortgage approvals for house purchase remains a long way off.”