Mortgages slow as costs & prices rise

26/03/2007

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Following last week's release of MBBG net lending figures for February, further information now available on lending to individuals shows that:

February's gross mortgage lending was £14.9bn, 7% more than the £14.0bn in February 2006. In line with seasonal patterns, February was well down on January's £16.6bn.

There were 167,000 mortgages approved (for all purposes) in February. Earlier house purchase approvals data have been re-stated from last months release to allow for the one-off cancellation of about 5,000 approvals in January. The average loan approved for house purchase was £150,400, some 14% higher than a year earlier. It has taken just under 4 years for the average loan size to rise from £100,000 to £150,000, having taken around 9 years to double from £50,000 to £100,000.

Underlying net mortgage lending (gross lending minus repayments and redemptions) rose by £5.2bn, less than the recent average of £5.7bn and Januarys increase of £5.4bn. The annual growth in net mortgage lending continued at around 14%.

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For further information, please contact:
Brian Capon, Head of media relations (020 7216 8810 brian.capon@bba.org.uk )
David Dooks, Director of Statistics (020 7216 8837 david.dooksd@bba.or.uk )

Notes to Editors:

1. The Major British Banking Groups (MBBG) account for some two-thirds of all mortgage lending outstanding and around 70% of gross lending. Additionally, they provide over half of all consumer credit outstanding and, within that, some 70% of all card credit. They include twelve of the fifteen largest mortgage lenders in the UK: Abbey, Alliance & Leicester, Barclays and Woolwich, Bradford & Bingley, HBOS (through Halifax and Bank of Scotland), HSBC Bank, LloydsTSB (through Cheltenham & Gloucester), Northern Rock, Royal Bank of Scotland and National Westminster.

2. Statistical releases relating to the business of the MBBG are available on the internet in the 'News Room' area of the BBA website.

3. Figures shown for net changes in amounts outstanding are consistent with Table A4.3 of the Bank of England's Monetary & Financial Statistics, which shows lending to individuals by banks and building societies excluding the effects of securitisations and loan transfers. However from January 2005 the series are also adjusted to remove fluctuations arising from regular intra-group transactions between banks and their non-bank subsidiaries, thus providing a better indication of underlying trends in mortgage lending. This has resulted in a restatement of series published previously. Other figures are consistent with the comprehensive data for lending to individuals by all lenders due to be released by the Bank of England on 29 March 2007.

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