BOE - Mortgage Lending data weaker than expected

inspector_monkfish

09:56 29Jun09 RTRS-UPDATE 1-UK mortgage lending posts weakest rise on record

LONDON, June 29 - British mortgage lending rose by its lowest amount on record in May and home loan approvals were weaker than expected, official data showed on Monday, in a sign that a housing market recovery is some way off yet.

Money supply figures from the Bank of England also showed its unprecedented 125 billion pound asset-buying programme may still not be having a significant impact on credit flows -- a key risk to Britain's chances of rebounding out of recession.

The BoE said mortgage lending rose by 324 million pounds in May, a third of the increase in April and a tenth of that a year ago. It was the weakest increase since comparable records began in April 1993 and below forecasts for a rise of 1.1 billion pounds.

Mortgage approvals -- loans agreed but not yet made -- numbered 43,414 in May, just up from 43,191 in April, weaker than analysts' forecasts for a reading of 46,000 and pointing to further house price falls ahead.

"Disappointing," said Philip Shaw, chief economist at Investec. "It's a reminder that the economy in general is still very sensitive to developments in the financial system and highly dependent on credit."

The BoE's preferred measure of money supply growth, which excludes other financial corporations, was unchanged on the month after a 0.1 percent rise in April -- as firms continue to pay down debt rather than invest.

On the year, it was 2.0 percent higher in May, down from 2.4 percent in April.

BoE policymakers have said there were some early signs its quantitative easing programme was starting to work its way through the economy, but these latest figures may disappoint them.

"It's perhaps a little early to be expecting QE to have filtered through fully but, nonetheless, one might have hoped for some more positive numbers over the past two months," Shaw said.

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BOE - Mortgage Lending data weaker than expected.

Expected weaker by who ?, we are in the worst recession since the war, who exactly expects mortgage lending to be anything but weak. Probably the same people who think we have reached the bottom of the housing market.

inspector_monkfish

ad9898 wrote: »

BOE - Mortgage Lending data weaker than expected.

Expected weaker by who ?, we are in the worst recession since the war, who exactly expects mortgage lending to be anything but weak. Probably the same people who think we have reached the bottom of the housing market.

by people that expect things

ad9898_3

As I suspected, with RMBS closed, mortgage approvals are very poor, there will be no significant rise in these approvals until we get more price falls, people want 2007 money for their house, but even if they find a mug, the money just does not exist anymore on a scale to bring back approvals to the 80,000 'normal'. 43k approvals really is bad news for the Spring bounce.

So what's going to give in the end ? In my view, prices will continue to fall as they are set at the margins by people who have to sell. It's simple math, approvals will only rise on the back of continued falls, when the money is finite.

themanbearpig

Mortgage approvals still rising

- According to BBC spin

The property market continued to pick up in May, according to figures from the Bank of England.
The number of mortgages approved for house buying rose to 43,414, up from the figure of 43,191 the month before.
It was the fourth month in a row that approvals have risen, suggesting that the recent increase in sales is likely to continue.
Recent evidence from lenders has also suggested that the slump in house prices is slowing down.
The Bank of England's figures show that net lending for house buying in May, by all lenders, grew by just £324m - the smallest monthly increase on record.
"Bank of England data suggests that mortgage approvals for house purchases only rose modestly in May," said Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors.
"While mortgage approvals by banks actually rose by around 2,500, loans from building societies and other specialist lenders both fell during the month," he added.
'Depressed' activity
The Building Societies Association (BSA) said approvals by its members in May were still about 35% lower than in May last year.
"Therefore, while the mortgage market appears to have recovered slightly from the start of the year, levels of activity remain depressed," said the BSA's director general Adrian Coles.
Building societies saw their savers withdraw more money than they put in, for the third month in a row.
"Those banks that are supported by the state are able to compete unfairly for retail deposits, and steps need to be taken to ensure that government backing for some institutions does not distort competition for savings," complained Mr Coles.
"These pressures are exacerbated by the current low interest rate environment; there is evidence that households are looking to repay debt rather than save," he added.
Net lending by building societies shrank for the fifth month in a row, reflecting the fact that borrowers have been repaying their mortgages at a faster rate than they have been taking out new home loans.




Its tragic that the BBC can't seem to produce a non-biased article about the housing market.

ad44downey

This graph clearly exposes all this talk of green shoots for the nonsense it is. The crash is back on.

barrooo

inspector_monkfish wrote: »

by people that expect things

Nice one , although not a big release, I noticed it hasn't really put a dent in the pound though, the market seems to be ignoring crappy data at the moment

geoffky

This is the slowest growth since records began.......

Graham_Devon

Gotta admit, the news is going exactly the way of the last downturn, which ad posted up the other day.

Up one month, down the next 2 months, then up and its a recovery, then back down.

My thoughts? We need to stop micro reporting and releasing new presdictions for the economy month on month. When theres a rise, predictions change, when there a fall the next month, predictions change again.

Plus, it's causing a lot of arguments on here!

purch

"Disappointing," said Philip Shaw, chief economist at Investec. "It's a reminder that the economy in general is still very sensitive to developments in the financial system and highly dependent on credit."

Oh dear.

That'll rattle a few cages !!!

inspector_monkfish

Graham_Devon wrote: »

Plus, it's causing a lot of arguments on here!

No. its not. :mad: