Mortgage lending by banks was down in July

According to the British Bankers’ Association (BBA) high street banks continued to see strong mortgage repayments. Net mortgage lending increased by £2.0bn in July compared with £2.1bn in June and £2.2bn for July 2009.

The annual growth in the banks' net mortgage lending was 4.1%, substantially ahead of the 0.9% for the whole mortgage market in June.

Although the abolition of HIPs has reportedly led to more houses being on the market so far there has not been any obvious impact on the number of house purchase approvals, which declined slightly in July.

The average value of house purchase approvals (£148,500) fell slightly in July but was still some 4.6% higher than a year ago. Numbers of remortgaging and equity withdrawal approvals are at similar levels to June and the previous six months average.

BBA statistics director, David Dooks said: "Gross mortgage lending remains stable, although demand for mortgages continues to be subdued. The greater availability of properties for sale and slowing house price growth have not yet fed through to increased house purchase approvals.

"Consumer credit outstanding continues to reflect high repayments together with pressure on household finances and job uncertainty while companies are tending to retrench and reduce their bank borrowing."