Boulger: Decline in BoE lending not cause for concern
Gross lending fell back from £12.8bn to £12.7bn from October to November while the number of approvals for secured lending dropped from 106,026 to 102,223 for the same period.
Ray Boulger, senior technical director at John Charcol, said the figures needed to be considered in the context of the last three months.
He said: “There was a very sharp jump in October for approvals much bigger than you would expect from just seasonal factors.”
In September, gross lending was £11.4bn and the number of approvals stood at 92,831.
Boulger added: “Much cheaper mortgage rates were starting to creep through in October and there was increased funding available.
“Many hoped to see this momentum continue through into November but if the figures are compared with September the picture is still positive and should not be a cause for concern.”
October’s spike in loan approvals should translate into a jump in completions in December and January.
Boulger expects the positive effect of lower rates to flow through into the remortgage market in the next few months boosting lending figures and approval numbers in 2013.
And he added: “Due to the combination of several lenders increasing their standard variable rates in 2012 and the recent drop in fixed rates, particularly 5-year products, there is now a bigger reason for someone who is on a standard variable rate to consider remortgaging rather than staying with their existing lender.”