Gross mortgage lending was a record £20.9bn in August, some 9% higher than July and 24% higher than the £16.8bn in August last year, latest figures from the British Bankers' Association reveal.
The BBA says net mortgage lending also rose by £6.2bn, compared with £5.8bn in July. This beat both the average of £5.4bn over recent months and £4.6bn in August 2005 as well.
There were 184,557 mortgage approvals last month, with an aggregate value of £19.1bn. The number of approvals was 5% lower than in August 2005, though their value was 4% higher. The average loan approved for house purchase was £141,500, 8% higher than a year ago.
Net lending on loans and overdrafts rose by £200m in August, compared with an increase of £0.4bn in July and an average rise over the previous six months of £0.3bn. In contrast, underlying net lending on credit cards fell by £400m, compared with a fall of £100m in July and compares with an average monthly contraction of £100m over recent months.
David Dooks, BBA's director of statistics, says: “Record gross and net mortgage lending is a reflection of house prices and mix of loans, rather than increased volumes. Compared to the numbers of secured loans approved at the same time in previous years, August shows robust and stable demand orientated towards house purchase rather than for other purposes, though below the volumes seen in 2003. The on-going weak appetite for consumer credit, driven by a further reduction in credit card lending, continued in August. ”
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