High Street Bank Lending Stable

British Banker's Association (BBA) has informed that May lending figures of UK high street banks are the same as those of April.

Despite this fact, BBA said the annual growth in the high street lenders' net mortgage lending of 4.3 per cent significantly exceeds the figure for just 0.9 per cent in April for the mortgage market in general.

In addition, low spending has resulted in consumer credit reducing by 2.5% over the year.

David Dooks of BBA stated that high street banks are the key participants of the mortgage market, securing as much as 75% of all new lending and releasing over 35,000 loans for property acquisitions monthly.

The low interest rate environment makes customers decide to reduce or pay off borrowing, in particular personal loans, instead of saving.

Lending to non-financial companies remains slow, mainly because of subdued demand for loans.

The figures demonstrate that the high street banks are now securing more than 70 per cent of approvals for house acquisitions, compared with about 55 per cent in 2007.

The average value of property acquisition approvals, at £150,500, turned out to be 10.5 per cent higher than twelve months ago. As for the numbers of approved applications for remortgaging and equity withdrawals, they are lower than a year ago.
 


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