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23rd Jul 2009
Net mortgage lending up in June says BBA
Net mortgage lending went up by £2.6bn in June, the latest figures from the British Bankers' Association have revealed.
This comes on the back of a £2.4bn net rise in mortgage lending in May and the current six month average of net mortgage lending is an increase o £3.1bn.
By contrast, unsecured net lending was down -£0.1bn, and the average over the last six months has also been -£0.1bn
David Dooks, statistics director at the BBA, says: “Numbers of new home loans approved by the high street banks are recovering from the very low level last November and so far this year, gross mortgage lending has topped £50bn.
"After repayments and redemptions, the banks’ net rise in mortgage lending of £18bn in the first six months is in sharp contrast to lending by the rest of the market, which is still contracting.
"People are showing little appetite for unsecured borrowing and are generally keeping more money in their accounts."
David Brown, commercial director at LSL Property Services, which owns Your Move and Reeds Rains estate agents, says that while it's good that mortgage lending is going in the right direction, he says that banks are effectively stockpiling depositors' cash rather.
He says: "By any measure mortgage lending is weak and the net outflow of loans to mortgage borrowers was much lower in June than the net inflow of personal deposits from savers - banks are effectively stockpiling depositors' cash.
"To some extent this is because consumer demand remains depressed, but banks can do more."
He adds: "This highlights the need for banks to be proactive in providing mortgage finance to customers and sensible in their underwriting criteria. That's the only way we will see the housing market start to return to some kind of normality."
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