Growth in bank lending slows to £1.8bn
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Net lending by the UK’s major banks grew 4.3 per cent in April compared with 4.5 per cent in March and growth of just 1 per cent for the mortgage market overall.
According to the British Bankers Association, net mortgage lending by the banks was up £1.8bn in April compared with an increase of £2.3bn the previous month and £2.7bn for the six months ending April 2010, on average.
Gross mortgage lending by the banks fell 5 per cent over April to £8.2bn compared with the £8.7bn recorded for March and 9 per cent compared with an average of £9bn for the six months to April.
The BBA says repayments were stronger than usual as banks actively encouraged borrowers to use surplus cash to reduce their borrowing.
The number of mortgage approvals in April were 3 per cent lower than in March at 75,429 and 6 per cent lower than the 80,205 average of the past six months. House purchase approvals increased month-on-month but remortgage approvals dropped 11 per cent from 24,215 in March to 21,580 in April.
BBA statistics director David Dooks says the data reflects household priorities, with people paying off debt rather than building up savings.
He says: “Uncertainties about the impact of government policies and the economy on households and businesses will continue to dent consumer confidence and influence decision-making.
“Overall lending to companies remains subdued, although the annual rate of contraction appears to have bottomed out.”
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Readers' comments (2)
John Whipple | 26 May 2010 4:14 pm
"..banks actively encouraged borrowers to use surplus cash to reduce their borrowing."
Means you small and very small business - we are reducing your overdraft and we are moving you to LIBOR and we are charging you a large fee. And that is if your lucky.
QE the low IQ policy
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Anonymous | 26 May 2010 6:58 pm
Till we get back to reasonable regulations, the
lending will remain down. There are people with hugh deposits, unable to buy main residences or BTL properties, because of straight jacket regulations? Overseas investors
who already own a lot of properties, cannot get
finance due to regulations. This blocks inward
investment in the economy. Its time we had a
sensible regulatory environment? Or the housing market will remain slow, therefore the rest of the economy?
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