14:21 PM, 27th October 2010, About 11 years ago
The banks continue to put a brave face on restricted lending by claiming mortgage approvals are up year-on-year – but any property investor or buyer trying to raise a loan to buy a home will probably tell a different story.
Lending figures issued by the banks, building societies and other financial sector groups are now in a cycle of the organisation putting a spin on short-term upward blips when long-term trends tell a different story.
The latest figures issued by the British Bankers’ Association fit the pattern.
They clearly show mortgage approvals by banks fell to a five-month low in July – but the BBA selects a headline statistic that shows a 4.1% net lending increase in the year to put a more favourable slant on the figures.
To make them look the good guys, the banks then point out even at 4.1% up, and their lending outpaces the meagre 0.9% sector average returned in June.
This reason this average is included is the banks pointing out that they are outperforming the sector when building society and other lenders are included in the statistics.
“Demand for mortgages continues to be subdued,” said David Dooks, statistics director at the BBA. “The greater availability of properties for sale and slowing house price growth have not yet fed through to increased house purchase approvals.”
The statistics show the quarterly trend for banks is granting about 75,125 loans per month worth an average £148,366 each.
Gross mortgage lending of £8.4 billion in July was slightly below the average of the previous six months.
These figures include all borrowings – like mortgages to purchase a family home, a buy to let, remortgages, and equity release.
“Although the abolition of HIPs has reportedly led to more houses being on the market so far there has not been any obvious impact on the number of house purchase approvals, which declined slightly in July,” said the BBA report.
“Remortgaging and equity withdrawal approvals are at similar levels to June and the previous six months average.”
BBA members account for two-thirds of all mortgage lending in the UK.
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