September figures for the main high street banks

Nia Williams

October 25, 2010

The annual growth in the banks’ net mortgage lending was 3.9% in September, substantially ahead of the 1% for the whole mortgage market in August.

Net mortgage lending increased by £1.6bn in September compared to £2.9bn in the same month in 2009 as repayments continued to hold up at fairly strong levels. weaken in September reflecting low demand.

The average value of house purchase approvals (£142,900) fell again in September but was still some 4.1% higher than a year ago.

Numbers of approvals for remortgaging have been slightly stronger in the last three months while those for equity withdrawal have fallen back slightly.

Subdued spending continues to lead to reduced consumer demand for unsecured credit (particularly on personal loans) which contracted by 1.6% over the past year.

The Bank of England’s Credit Conditions Survey suggests that credit availability improved for medium and smaller businesses in Q3, though demand weakened.

The decline in lending to non-financial companies reflects a sharp fall in lending to real estate.

The increase in lending to financial companies reversed the fall seen last month.

Commenting, BBA statistics director, David Dooks said: “Subdued mortgage activity and little demand for unsecured credit are a reflection of household uncertainties ahead of the Spending Review. Demand for new mortgages remains low despite more properties on the market and falling house prices.”

Andrew Montlake, director, independent mortgage broker, Coreco, said: “Figures continue to remain gloomy and the expected pre-Christmas bounce has so far failed to materialise. But this is not simply a case of lack of demand. Whilst the fall-out from the Spending Review may make buyers more cautious, it is ever-tightening lending criteria that continues to stifle the needs of many decent borrowers who wish either to remortgage or move into their first property.

“It is a shame there are many who are unable to take advantage of some of the cheapest mortgage products we have seen, or are likely to see, for a long time.”

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