Mortgage borrowing falls
Published On 25 October 2007
Mortgage lending in the UK was subdued in September, a new report has claimed.According to the British Bankers' Association (BBA), gross mortgage lending was £18.5 billion in the month, just 3.5 per cent higher than in September 2006.
What's more, underlying net mortgage lending (gross lending minus repayments and redemptions) only rose by £5.8 billion - considerably less than August's figure of £6.1 billion.
Despite this subdued picture, credit card borrowing rose by £100 million, as did borrowing on personal loans and overdrafts.
"Lower amounts of new mortgage lending and fewer loans approved for house purchase signal a weaker outlook for the mortgage market, particularly if loan supply reduces in the aftermath of the recent financial markets difficulties and borrowing costs remain at current level," commented David Dooks, BBA director of statistics.
"Despite reports of stronger retail sales, card spending was low in September, but so were repayment levels, giving rise to a small increase in net borrowing alongside a similar rise in loans and overdrafts, but overall demand for unsecured borrowing remains very weak."
A recent report suggested that some homeowners were using credit cards to help them meet monthly mortgage repayments.
