Net mortgage lending 'on the rise'
27th Jul 2012
Net mortgage lending by UK banks grew by 0.9 per cent in the year to June, according to new figures released by the British Bankers' Association (BBA).
The data shows that personal deposits rose by 5.1 per cent over the 12 months to June, boosted by strong inflows continuing after the start of the ISA tax year.
High street banks saw £16.1 billion flow into cash ISAs in the first half of 2012 compared with £10.2 billion in the first half of 2011, though outstanding unsecured lending contracted slightly by 2.3 per cent over the 12 months to June.
BBA statistics director David Dooks said the reason for this may be that paying off loans or overdrafts and building up deposits is the current consumer ambition.
He explained: "Public holidays and wet weather put a damper on mortgage approvals in June and demand for unsecured household borrowing was also low."
The expert said that business output remains weak, so demand for finance is subdued, with companies tending to delay investment and concentrate on reducing their bank debt.
However, recent data from the Council of Mortgage Lenders showed that house purchase lending in the UK increased substantially in May, suggesting that the slump in activity that followed the end of the first-time buyer stamp duty holiday appears to have been short-lived.
Posted by Staff Writer: Frances McDonald
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