Gross lending up
BBA statistics director, David Dooks said: “October saw the banks lend £7.5bn of new mortgages and approve the future draw-down of a further £8.2bn, whilst households also took £1bn of new personal loans and used the extended credit on cards to fund spending of £7.1bn.
“However, repayment levels are high enough to offset gross lending and generate subdued net lending data, not only in the household sector, but also in the business sector where large companies are using capital market funding.”
Ashley Brown, director of independent mortgage broker, Moneysprite, said:
“Seldom has saving been seen as sexy. The fact that so many people are putting cash away and paying down debt is a clear sign of the weakness of consumer confidence.
“The appetite for debt is patchy at best. Net mortgage lending is still growing at a meagre rate, even if gross mortgage lending in October crept up slightly.
“The number of mortgages approved also increased slightly last month, but progress is still painfully slow.
“The supply of mortgages is improving as the Funding for Lending Scheme begins to encourage lenders to reduce interest rates on their higher LTV products.
“But the pace is glacial and will remain so until well into next year. Lending criteria are as tough as ever and many would-be buyers are continuing to sit on their hands for fear that the worst is not yet passed in the housing market.
“House prices continue to be polarised – with rude health in London, level pegging in the South and sluggish performance in the rest of the country.
“So while October’s mortgage performance may have moved out of stagnation – just – with such instability in the housing market the outlook for mortgage lending next year is still mixed at best.”