BBA reports increase in mortgage lending levels
The British Banker’s Association has recently reported that whilst mortgage lending did hit rock bottom levels over the past couple of years June saw mortgage lending levels increase to their highest level in around fifteen months.
However, despite the increase in mortgage lending levels the figure is still only around half the average that it was three to four years ago according to officials from the BBA.
In June 35,235 mortgages were approved, and this was an increase from the 32,000 that were approved in the previous month. The value of money advanced for mortgages also increased, rising from £2.4 billion in May to £2.6 billion for June. BBA officials said that several years ago mortgage approval levels stood at an average 55,000 per month, so although the figure has increase there is still a long way to go.
An official from the BBA said: “Numbers of new home loans approved by the high street banks are recovering from the very low level last November and so far this year, gross mortgage lending has topped £50bn. People are showing little appetite for unsecured borrowing and are generally keeping more money in their accounts.”
One economist said: “The big picture is that activity is rising from an extremely low base and, therefore, has much further to go before the floor for house prices is reached. With unemployment rising and credit conditions still tight, that may take some time.” Another official added: “Some have suggested that things are finally beginning to pick up, but I don’t buy it. From where I’m standing, the next few months are still going to be exceptionally difficult for borrowers and this will only change once the lenders begin to lend – and they’re still not lending at levels sufficient to drive a sustained recovery in the property market.”
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