Gross lending declined in August
Gross lending secured on dwellings was £11.3bn in August compared to the previous six-month average of £11.9bn while repayments in the same month were £11.0bn compared to the previous six-month average of £11.4bn.
The number of loan approvals for house purchases (47,665) was broadly unchanged in August and was lower than the previous six-month average (49,013). The number of approvals for remortgaging (26,139) increased in August but remained below the previous six-month average (27,686).
The number of approvals for other purposes fell slightly in August (15,437) and remained below the previous six-month average (17,434).
Jonathan Harris, director of mortgage broker Anderson Harris, said: “This data has been eagerly awaited to see what impact the Bank’s £80bn Funding for Lending scheme is having. The answer: not a lot.
“A decline in lending in August doesn’t sound too positive and doesn’t tally with a recent Bank of England survey where lenders claimed the scheme was helping boost lending to individuals and households.”
Total lending to individuals (excluding student loans) fell by £0.4bn in August, compared to the previous six-month average increase of £0.7bn. The 12 month growth rate was broadly unchanged at 0.6%.
Within total lending, lending secured on dwellings fell by £0.3bn, compared to the previous six-month average increase of £0.7bn. The three-month annualised growth rate fell to 0.1% whilst the twelve-month growth rate was 0.7%.
Damian Hales, partner at Deloitte, said: “It would appear that the euphoria generated by a summer of sport didn’t extend to bank lending, with lending to individuals both unsecured and secured falling in August.
“Given other recent statistics this looks like a summer blip, and September’s figures are likely to show increased lending following the introduction of the ‘Funding for Lending’ scheme.”
But Harris added: “Only more mortgage deals at higher loan-to-values with better rates might help unlock that group of people who would like to buy but are struggling to do so.
“If lenders don’t use cheap funds from the Funding for Lending scheme to target this group, there isn’t likely to be much of a positive impact on the housing market.”