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The British Bankers Association (BBA) has reported that mortgage gross lending increased 7 per cent in April 2008. Despite vibrant re-mortgaging activity in recent weeks, the number of home loans for house purchase is down 39 per cent on a year earlier, leaving gross lending down 6.3 per cent year-on-year.
The BBA is the leading UK banking and financial services trade association and represent its members, from 60 countries, on domestic and international issues.
David Dooks, statistics director at BBA said,
Pressures on household finances, stalling house prices and tightening of lending criteria in response to lower liquidity are all constraining demand for house purchase and equity withdrawal loans, which are both well down on levels last year.
In contrast, there is an active re-mortgaging market as people switch lenders to obtain better deals. With some £18 billion of new lending and nearly 150,000 loans approved in April, it is clear that, contrary to some reports the mainstream mortgage market has not ground to a halt.
A strong re-mortgaging market has given a much needed lift to a subdued sector, with the number of approvals increasing to 74,222, arise of 10.7 per cent from last year. In contrast 38,704 mortgages were issued for home loans in April 2008, showing a slight improvement on the previous month’s figure of 35,546. However approvals continued to be well down on the same period in 2007.
The BBA data reveals personal deposits also rose strongly in April with the banks receiving a record net inflow, partly reflecting stronger ISA deposits than in previous years, but also reflecting a response to the higher saving rates of return, currently available on high street accounts.
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- Update: UK BBA: Mortgage Approvals Decline In July (forexlive.com)
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