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.”