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BBA reports increase in mortgage lending

Mortgage lending in July was 19 per cent higher than for the same period last year, according to the British Bankers’ Association.

Gross lending stood at £19.1bn, 7 per cent below the record figure of £20.5bn in June, but up from £16bn in July last year.

There were 178,438 mortgage approvals in July, with an aggregate value of £18.4bn. This was 2 per cent lower than in July 2005, though their value was 8 per cent higher. The average loan approved for house purchase was £139,200, 5 per cent higher than a year earlier.

BBA director of statistics David Dooks says: “July is typically a slow summer month for mortgage approvals, so the lower numbers and value of loans approved compared to June were anticipated. Allowing for this seasonality suggests that loans approved for house purchase and remortgaging remain on a constant trend, whilst demand for equity withdrawal has continued to weaken since the turn of the year.

“The drawdown of loans approved in previous months shows strong mortgage lending to have been approaching the peaks of 2004, ahead of the interest rate rise in early August. Meanwhile, unsecured lending is displaying quite a different trend, with the growth rate continuing to decline, largely reflecting the on?going contraction in credit card borrowing.”

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