It says due to a much-maligned remortgage market, which is down 60.2 per cent, net lending has reached an eight -year low of £2.3bn. Gross lending is down 50.7 per cent on last year’s figures, down to £7.7bn. Approvals were up £400m on April’s figures, but still 43.8 per cent down on May 2008 numbers.
Although mortgage approvals continue to increase, the BBA reported that personal deposit inflows continued to be weak and consumer credit growth is minimal. It also found that lending to businesses was little changed overall.
BBA statistics director, David Dooks says: “Steady monthly increases since last November have seen the number of loans approved for house purchase recover to levels seen in early 2008, although gross and net mortgage lending show a subdued wider mortgage picture.
“However, unlike much of the mortgage market, the high street banks are still seeing lending growth and improved mortgage availability is reflected in higher average loan approval values.
“Consumers’ borrowing appetite remains weak, reflecting uncertainty over household circumstances, so credit growth is negligible and spending activity on credit cards is down on this time last year. Lending to non-financial companies was little changed overall in May.”