December's mortgage lending continued to be relatively weak and approvals were again
low. Unsecured lending remained subdued and personal deposits showed only modest
growth.
Net mortgage lending in December increased by £4.7bn, slightly up on November's figure of £4.6bn, although down on the previous six month average of £5.2bn. Annually, mortgage lending has grown by 12.8%. These figures include both house purchase as well as remortgaging and equity withdrawal.
Of more relevance to the housing market, the value of mortgages approved for house purchase in December was £6.5bn, compared with £6.9bn in November, seasonally adjusted. This is down -33.0% on a year earlier.
In terms of the actual number of loans approved for house purchase, this was 42,088 in December, compared with 43,944 in November and the six month average of 53,781. This is down -37.8% on a year earlier. The average loan value is now £155,200, which is an increase of +7.8% over the year.
BBA statistics director, David Dooks, said of the latest data: "Mortgage lending weakened notably in the second half of 2007 as the credit crunch impacted on banks' ability to lend. At the same time, demand for mortgages also softened in the face of increased borrowing costs and lower disposable income. The combination of these factors is resulting in the marked market slowdown and weakness in house prices we are now seeing. Reports of high street sales over the Christmas period were mixed, but our figures show consumer borrowing to have been muted in December."
