UK mortgage approvals up 97.7 pct y/y in Oct-BBA

inspector_monkfish

09:32 24Nov09-UK mortgage approvals up 97.7 pct y/y in Oct-BBA

LONDON, Nov 24 - The number of home purchase loans approved by British banks in October was almost double that of a year ago, a survey showed on Tuesday.

The British Bankers' Association said 42,238 mortgage applications were approved last month. That was slightly higher than the 42,073 loans approved in September but 97.7 percent up from last year when activity ground to a halt at the height of the financial crisis.

Net mortgage lending rose by 3.1 billion pounds in October, the same as in September.

The figures chime with other surveys showing record low interest rates have helped stabilise Britain's housing market after sharp price declines last year.

inspector_monkfish

09:30 24Nov09 UK OCT NET MORTGAGE LENDING +GBP3.1B VS SEP +GBP3.1B -BBA

09:30 24Nov09 UK OCT MORTGAGE APPROVALS 42,238 VS SEP 42,073 - BBA

09:30 24Nov09 UK OCT GROSS MORTGAGE LENDING +GBP9.0B VS SEP +GBP8.9B -BBA

09:30 24Nov09 UK OCT LENDING TO NON-FINCL FIRMS -GBP0.8B VS SEP -GBP3.9B

09:34 24Nov09 UK Oct Mortgage Lending Unchanged From Sep - BBA


LONDON--Net mortgage lending by U.K. banks was unchanged from a
month earlier in October, while non-financial companies continued to repay their debt albeit at a slower pace, data from the British Bankers Association showed Tuesday.

Seasonally adjusted net mortgage lending grew GBP3.1 billion in October, the same rise reported in September.

A year earlier lending grew GBP3.7 billion, the BBA said.

The BBA also reported non-financial firms made a net repayment of GBP0.7
billion in September, compared with a GBP3.9 billion repayment in September.

A recent anecdotal bank-lending survey from the Bank of England showed demand for funds from companies slowed toward the end of the year.

Meanwhile, the BBA data showed a less upbeat outlook for the housing market than in recent months. Mortgage approvals --a good forward-looking indicator for housing market activity--totaled 42,238 in October, slightly up from the 42,073 total reported for September.

That was weaker than expected. Economists surveyed by Dow Jones Newswires had forecast approvals would hit 45,000.

However, approvals were above year-ago levels yet again, amid signs that
average typical mortgage interest rates have remained around the 4% mark as the official Bank of England rate has been on hold at a record low of 0.5% for much of the year.

"The longer it takes to emerge from recession, the longer we will see
households and businesses continue to borrow with caution," said David Dooks,
statistics director for the BBA.

"A mixture of lower business demand, alternative corporate funding and
tighter lending conditions, all giving rise to the on-going contraction in
lending to non-financial companies, is a reflection of current market
conditions," Dooks said.

Really2

I was expecting for approvals to fall back a bit given the time of year.

Generali

Interesting.

This is the link to the BBA release:

http://www.bba.org.uk/content/1/c6/01/69/14/October_2009_Monthly_Statistics_Release.pdf

Increase in cash lent for new purchases is up 4.6%, number of mortgages for new purchases is up 97.7%. House purchase approvals are up 118%!!!

What do we learn from that?

Well clearly the amount of cash lent per mortgage for purchases has roughly halved. That implies that cheaper places are selling but more expensive ones are not.

For deflation watchers, personal lending is down 1.6% YoY gross mortgage lending is down 19.5% YoY and MEW is down 10% on the year and 46.&% over two years.

Mixed messages in there I guess.

My reading is that FTBs are in the market, consumers aren't borrowing and people are wary about trading up.

Emy1501

Really2 wrote: »

I was expecting for approvals to fall back a bit given the time of year.

Not really in my opinion. Approvals lag 4-6 weeks from offers made on average I would say. Therefore I suspect mosts mortgage approvals for October are based on offers made in September which is normally a good month for selling.

I would expect approvals to fall off come Decembers figures.

Really2

Emy1501 wrote: »

Not really in my opinion. Approvals lag 4-6 weeks from offers made on average I would say. Therefore I suspect mosts mortgage approvals for October are based on offers made in September which is normally a good month for selling.

I would expect approvals to fall off come Decembers figures.

Are approvals AIP or mortgage offers. If they are AIP I disagree as most offers will not be accepted until the buyer has a AIP.
You may be right if it is a written offer but I don't think many AIP to written offers take that long either.

lemonjelly

Generali wrote: »

Interesting.

This is the link to the BBA release:

http://www.bba.org.uk/content/1/c6/01/69/14/October_2009_Monthly_Statistics_Release.pdf

Increase in cash lent for new purchases is up 4.6%, number of mortgages for new purchases is up 97.7%. House purchase approvals are up 118%!!!

What do we learn from that?

Well clearly the amount of cash lent per mortgage for purchases has roughly halved. That implies that cheaper places are selling but more expensive ones are not.

For deflation watchers, personal lending is down 1.6% YoY gross mortgage lending is down 19.5% YoY and MEW is down 10% on the year and 46.&% over two years.

Mixed messages in there I guess.

My reading is that FTBs are in the market, consumers aren't borrowing and people are wary about trading up.

In a way, bit of a misleading headline, as the comparison is to a period where a juddering halt occurred 12 months ago.

The part of Gen's post I've highlighted is particularly interesting I think.

My take on it, is that STR's are back in the market, with some FTB & potentially a small amount of downsizers (anecdotal). Definitely agree about people concerned about trading up. Feeling that consumers want to borrow, but can't, though there are more people who are more averse to credit than they were, or simply can't access credit.

Emy1501

Really2 wrote: »

Are approvals AIP or mortgage offers. If they are AIP I disagree as most offers will not be accepted until the buyer has a AIP.
You may be right if it is a written offer but I don't think many AIP to written offers take that long either.

Not sure really I would be surprised if they are AIP as as fair few get these just to see how much they can borrow and will do so with a few lenders.

I haven't bought since 2005 and then you were looking at anywhere between 6-8 weeks to get the actual mortage offer. Things maybe quicker now or they may do it from when the surveyor approves the mortgage it would be interesting to know as I have also considered this when looking at the haliwide figures.

Generali

Emy1501 wrote: »

Not sure really I would be surprised if they are AIP as as fair few get these just to see how much they can borrow and will do so with a few lenders.

I haven't bought since 2005 and then you were looking at anywhere between 6-8 weeks to get the actual mortage offer. Things maybe quicker now or they may do it from when the surveyor approves the mortgage it would be interesting to know as I have also considered this when looking at the haliwide figures.

The figures are quoted as being net of cancellations in their definitions section. That implies to me that these are actual mortgages offers rather than AIPs.

chucky

that's interesting Generali

Generali wrote: »

Increase in cash lent for new purchases is up 4.6%, number of mortgages for new purchases is up 97.7%. House purchase approvals are up 118%!!!

What do we learn from that?

Well clearly the amount of cash lent per mortgage for purchases has roughly halved. That implies that cheaper places are selling but more expensive ones are not.

that would dispel the myth that it's the higher priced properties that are selling and skewing the indexes...

Generali wrote: »

My reading is that FTBs are in the market, consumers aren't borrowing and people are wary about trading up.

another myth on here is that FTB's are not going anywhere near the housing market, it's been said for months that they are but not taken too seriously...

Generali

chucky wrote: »

that's interesting Generali

that would dispel the myth that it's the higher priced properties that are selling and skewing the indexes...


another myth on here is that FTB's are not going anywhere near the housing market, it's been said for months that they are but not taken too seriously...

That's the conclusion I take from looking at those BBA numbers. I'd be really interested to see a back of envelope analysis on a similar basis by entrenched bears or bulls using all of the figures, not just some.