Loans for house purchase well ahead in May

Loans for house purchase rose to a seasonally adjusted 31,162 in May up from 29,018 in April and against a six month average of 25,032, this puts May loans 15.8% ahead of the same month last year. Meanwhile re-mortgaging continued it's decline with only 24,847 loans in May against a six month average of 28,234, leaving volumes some 60% below last year. Loans for other purposes and equity withdrawal also declines with 19,208 in May against a six month average of 22,055.

BBA statistics director, David Dooks, said of the latest data: “Steady monthly increases since last November have seen the number of loans approved for house purchase recover to levels seen in early 2008, although gross and net mortgage lending show a subdued wider mortgage picture. However, unlike much of the mortgage market, the high street banks are still seeing lending growth and improved mortgage availability is reflected in higher average loan approval values.

“Consumers’ borrowing appetite remains weak, reflecting uncertainty over household circumstances, so credit growth is negligible and spending activity on credit cards is down on this time last year. Lending to non-financial companies was little changed overall in May.”