Higher interest rates have not had the expected impact on mortgage borrowing, according to the British Bankers' Association (BBA).
Statistics for gross mortgage lending in January show that borrowing is up on this time last year despite experts predicting the opposite.
January’s gross mortgage lending was £16.6bn, 15% more than the £14.5bn in January 2006. In line with seasonal patterns, January was well down on December’s £18.1bn.
The BBA also says there was an underlying total of 141,200 mortgage approvals in January.
However, due to the one-off removal of around 7,000 long-outstanding approvals, the reported number, which gives a slightly false impression, is lower, at 134,200 with an aggregate value of £13.1bn.
The average loan approved for house purchase was £146,700, some 16% higher than a year earlier.
Underlying net mortgage lending (gross lending minus repayments and redemptions) rose by £5.6bn, in line with the recent average, compared with December’s increase of £5.7bn
The annual growth in net mortgage lending continued at around 14%.
Credit card borrowing fell by £0.5bn in the month while other loans and overdrafts rose by just £0.2bn (revised).
David Dooks, BBA director of statistics, says: “January saw a continued stable demand for mortgages. Actual borrowing on mortgages remains strong compared with this time last year, so the impact of higher interest rates has yet to feature.
“Prudent repayments, particularly on credit card accounts, are keeping the unsecured credit picture very subdued.”
The BBA also says early figures show consumer credit is particularly weak. New borrowing on credit cards totalled £7,239mn in January; 7% lower than January 2006.
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