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BBA: Lending hits new low
28 July 2008 10:30
Mortgage lending by banks fell severely last month, according to new figures from the British Bankers' Association (BBA), despite the relative strength of remortgaging activity.
Gross mortgage lending by banks dipped by 0.5 per cent from May and by 23.2 per cent year-on-year to £15.1 billion in June, while total mortgages approved fell by 9.9 per cent from May and by 37.2 per cent from June 2007 to £12.8 billion.
This owed much to declining approvals of mortgages for homebuyers, which fell by 21.4 per cent from May and by 66.4 per cent year-on-year to £3.3 billion last month, while lending volumes fell by 23.2 per cent from May and 66.9 per cent year-on-year to 21,118.
By contrast, remortgaging was comparatively healthy, with approvals decreasing in volume terms by only 4.8 per cent from May and by just 13.1 per cent year-on-year to 59,637 in June, meaning that it accounted for a record 55 per cent of all lending.
The BBA's David Dooks commented that the record low level of lending for house purchases meant market activity was likely to dip to its worst levels since the early 1990s, although he noted that large numbers of borrowers are still remortgaging with banks.
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