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Figures published by The Bank of England giving fiscal details for April
show that mortgage lending has seen a rise, putting it at the highest
level so far this year. According to The British Bankers Association,
gross mortgage lending among its members reached £14.1bn in
April, an increase of 3% on March but 13% lower than April 2004's
figure of £16.2bn.
New mortgages during the month amounted to £8.5bn spread
over 69,323 mortgages, the number of approvals being 2% higher
than for the preceding month. This is usual for this period of
the year, and is inline with the expected seasonal upturn that
is expected for the summer months.
Despite the month on month rise, overall there is still a slowdown
in mortgage lending, during the same period last year, approvals
of house purchase loans were 13% higher in value. There is one
area that has seen a rise when compared to twelve months ago -
the average approved mortgage for house purchases was £122,700,
up from £110,800.
During April, net new consumer credit rose by just £1.3bn
– falling short of predictions. This was due mainly to consumers’
reluctance to borrow on their credit cards, with a net payback
on credit cards actually occurring.
Whilst growth in net mortgage lending continued to be relatively
weak during April, it does appear that the falling trend may be
stabilising. Approvals for house purchase are responding to the
typical spring stimulus and they indicate sufficient activity
to support mortgage lending in the near-term.
Overall, the consumer credit figures show that people are being
more cautious about the credit that they are taking on, which
adds weight to the view that the Bank of England will move to
reduce interest rates within the near future, which will be good
news for all mortgage holders.
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