08 September 2009 Credits: ukpropertyshop
New mortgage lending highest for 17 months

The July figures for the main high street banks show increases in the number of mortgage approvals and the amount of new lending, though this was below seasonal expectations, according to the British Bankers' Association (BBA).

However, offsetting repayments gave rise to a net mortgage lending figure which was the lowest since October 2000. Unsecured lending has continued to be weak and the trend in deposit levels appears to be improving.

BBA statistics director, David Dooks, said of the latest data: "The numbers of mortgages approved for house purchase each month by the high street banks have continued to recover from last November's low point, but new lending is largely being offset by repayments, so that net rises remain relatively weak. Unsecured borrowing is subdued, with households focused on managing their personal finances and building up deposits.
"Lending to non-financial companies has contracted over the last year, as would be expected given both the recession and large corporates using the capital markets to raise funds, but amounts outstanding are only 3% lower than a year ago."

Nicholas Leeming, the director of propertyfinder.com, comments: "Buyers are champing at the bit to take advantage of attractive house prices, but the banks - awash with vast sums from the government and Bank of England - are suppressing new lending and encouraging borrowers to repay existing loans. Without a concerted effort from lenders to provide more assistance to homebuyers by providing finance, the recovery in the housing market is likely to be drawn out and painful."