Fewer mortgages agreed

Gross mortgage lending in the UK fell by 1.5 billion in August to 16.6 billion, according to the British Bankers' Association (BBA).

08:46 28 September 2004

Gross mortgage lending in the UK fell by 1.5 billion in August to 16.6 billion, according to the British Bankers' Association (BBA).

BBA figures show that net lending dipped last month from July's record monthly total, though it was 3.3 per cent above the total for August 2003.

A total of 201,700 loans were approved in August, worth a total of 15.3 billion. Approval numbers were 4.1 per cent down on July and 15.1 per cent weaker than August 2003, the BBA data reveals.

In particular, the number of loans approved for house purchase was 9.5 per cent lower than July and 21.6 per cent lower than August 2003. The average approval for house purchase fell slightly, to 112,100.

Following seasonal adjustment, the rise in net lending of 4.4 billion was the weakest growth since June 2002 and lower than the average of 5.6 billion for the previous six months.

David Dooks, BBA director of statistics, said: "The slowing down of net mortgage lending in August looks set to continue in the next couple of months. A further weakening in the numbers of loans approved (particularly for house purchase and equity withdrawal) in August indicates that households' appetite for secured borrowing is moderating."

Growth in overall net consumer credit was stronger than in July, rising by 1.2 billion (seasonally adjusted), the largest increase since March. Credit card borrowing was stronger than in July, growing by 0.6 billion, whilst demand for personal loans and overdrafts, rose by 0.6 billion, slightly above the average over the previous six months, the BBA claims.