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Mortgage lending slumps to £112m

Mortgage lending slumps to £112m

Mortgage lending dived to less than a 10th of the level seen during the previous month in September as activity in the housing market remained subdued, figures show.

Net lending, which strips out redemptions and repayments, totalled just £112 million during the month, down from £1.62 billion in August, according to the Bank of England.

Lending levels are unlikely to pick up going forward, with the number of mortgages approved for house purchase falling for the fifth consecutive month to 47,474 - the lowest level since February, which is traditionally a quiet month for the housing market.

The steep fall in net lending is likely to have been caused by a combination of a lack of activity in the property market and existing homeowners focusing on reducing their mortgage debt while interest rates remain low.
Earlier this week the British Bankers' Association said net mortgage lending by the major banks had fallen to its lowest level for a decade.

Potential buyers are continuing to stay away from the market as they wait for the outlook for both house prices and the wider economy to become clearer. But homeowners are continuing to put their properties up for sale, creating a mismatch between supply and demand and putting downward pressure on prices.

Vicky Redwood, senior UK economist at Capital Economics, said: "September's UK household borrowing figures provide more evidence - as if any were needed - of the problems in the housing market.
"The number of mortgage approvals edged down very marginally from their already exceptionally low level of 47,500. These low levels of activity now seem to be contributing to renewed falls in house prices."

The figures come the day after both Nationwide and the Land Registry reported house price falls, with Nationwide saying values dropped by 0.7% during October, while the Land Registry reported a 0.2% slide for England and Wales in September.
Unsecured borrowing rose by £262 million during September, up on both the previous month's contraction of £21 million and the recent six month average. Within the total, consumers increased the amount they owe on credit cards by £185 million, while borrowing through loans and overdrafts rose by £77 million - the strongest increase since May

http://www.google.com/hostednews/ukpress/article/ALeqM5ijWXtKy5sX7PIyRWMUsErJkpwVmg?docId=N0047921288342825126A
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Comments

  • Graham_Devon
    Graham_Devon Posts: 58,560 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    Surely that's got to be an error?!??
  • doire_2
    doire_2 Posts: 2,275 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    Surely that's got to be an error?!??


    It is very low isnt it.
  • Graham_Devon
    Graham_Devon Posts: 58,560 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    Low!? It's something like 700 average priced houses.

    I'm all for the bearish statistics, but thats insane.

    £1.12bn, surely?
  • doire_2
    doire_2 Posts: 2,275 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    Low!? It's something like 700 average priced houses.

    I think someone has made a !!!! up somewhere :D
  • DervProf
    DervProf Posts: 4,035 Forumite
    doire wrote: »
    I think someone has made a !!!! up somewhere :D

    More like 700 people have. ;)
    30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.
  • Wheezy_2
    Wheezy_2 Posts: 1,879 Forumite
    Low!? It's something like 700 average priced houses.

    I'm all for the bearish statistics, but thats insane.

    £1.12bn, surely?


    112M net lending ;)

    which strips out redemptions and repayments
  • chucky
    chucky Posts: 15,170 Forumite
    10,000 Posts Combo Breaker
    edited 29 October 2010 at 11:14AM
    Wheezy wrote: »
    112M net lending ;)
    which strips out redemptions and repayments
    pmsl - some people need to look at the definition of net lending

    froth, froth, froth from the usual suspects
  • doire_2
    doire_2 Posts: 2,275 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    You can spin it anwyay you like. This isnt good news for the housing market. And that is all that matters. Bye bye chucky
  • Wheezy_2
    Wheezy_2 Posts: 1,879 Forumite
    doire wrote: »
    You can spin it anwyay you like. This isnt good news for the housing market. And that is all that matters. Bye bye chucky

    Nothing to spin.
    It's 112M allright.
    If I had overpaid 1M on my mortgage last month, it would have been 111M.
    Bye bye doire :wave:
  • Blacklight
    Blacklight Posts: 1,565 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    doire wrote: »
    You can spin it anwyay you like. This isnt good news for the housing market. And that is all that matters. Bye bye chucky

    A 90% drop would mean either, 90% less property sold (48,000 - 90% = 4,800) or a 90% drop in house prices.

    Even the loser from Capital Economics quoted in the article understands that the number changing hands hasn't gone down and we all know that the prices are unchanged.

    Clearly you haven't got the faintest idea what's going on.
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