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Demand for BTL loans pushes up banks’ lending

High-street banks’ gross mortgage lending rose by 5 per cent in August to £8.2bn, up from £7.8bn in July, according to the British Bankers’ Association.

The total lent in August is also 5 per cent higher than the previous six-month average of £7.8bn.

There were 78,288 mortgage approvals worth £9.1bn in August. This compares with 75,315 approvals worth £8.8bn in July.

Of the mortgage approvals in August, 35,226 approvals worth £5.2bn were for house purchase compared with 33,734 approvals worth £5bn in July.

In addition, the banks’ net mortgage lending was £0.7bn in August, down on £0.9bn in July, which is also the figure for the previous six-month average.

BBA statistics director David Dooks says: “The weak economic environment continues to undermine confidence in both household and business sectors, which impacts on borrowing demand.

“The banks’ new mortgage lending has ticked up in the past couple of months with higher buy-to-let demand and some business sectors are edging towards year-on-year borrowing growth. However, the general landscape is one of households not wanting to take on more borrowing and businesses waiting for trading conditions to improve before borrowing to expand or invest.”

He adds that against this economic backdrop, paying down debt continues to dominate the net lending figures.

John Charcol senior technical manager Ray Boulger says: “There is a real risk over the next three months that turbulence in the markets feeds into the wholesale lending markets which banks rely on, meaning a drop in activity. So the banks are likely to concentrate their efforts on competing for retail deposits and that will squeeze the building societies.”



New European transaction tax could hit investors hard

European Commission proposals for a financial transaction tax could see Ucits investors taxed three times, according to the Investment Management Association. The Commission says the new tax, announced today, is a means of ensuring the financial sector makes a fair contribution to “the cost of re-building Europe’s economies and bolstering public finances”. The UK has […]

Aifa may raise fees for networks

Aifa is considering introducing higher membership fees for networks to bring their contribution more in line with fees paid by directly authorised firms. Money Marketing understands. Directly authorised members of Aifa currently pay a fee at firm level and for each of their advisers. Money Marketing understands that networks pay a fee for the network […]

India budget: BJP focuses on growth

By Kunal Desai, Head of Indian Equities

With markets kept open on Saturday, finance minister Arun Jaitley delivered a promising budget focused on growth and decentralisation. While many complained about a six-day working week, there was much to be pleased about and the markets rallied in the afternoon to finish in the green.


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