Mortgage demand moderating

23/04/2007

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Latest figures from the Major British Banking Groups, for March 2007, show that:

Total sterling lending to the UK private sector showed a net underlying increase of £9.7bn (+0.8%) to £1,299bn. This compares with an underlying rise of £9.0bn in February and an average of £11.6bn over the previous six months.

Net mortgage lending rose by an underlying £5.1bn. This was unchanged from the slightly downwardly revised increase last month but lower than the monthly average of £5.5bn over the previous six months. Unsecured personal lending fell by £0.2bn in March, similar to the fall in February. Credit card borrowing accounted for £0.1bn of the fall, with loans and overdrafts virtually unchanged.

There was a strong lending increase to real estate companies (+£1.1bn), but there were decreases in lending to construction (-£0.2bn), manufacturing (-£0.1bn) and transport, storage and communication (-£0.1bn).

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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 MBBG comprise the banking groups of Abbey, Alliance & Leicester, Barclays, Bradford & Bingley, HBOS, HSBC Bank, Lloyds TSB, Northern Rock and The Royal Bank of Scotland; a full list of banks covered is attached overleaf.

2. The definitional content of these tables is consistent with the provisional M4 statistics (covering all monetary financial institutions) released today by the Bank of England. 'M4' reflects the non-bank, non-building society part of the UK private sector (including individuals). As the MBBG statistics cover a substantial part of sterling lending by all banks to the private sector, they may provide an indication of the direction of total bank lending.

3. Although the total lending figure makes allowance for write-offs, no adjustments can be made to the industrial categories: reductions in lending may thus be exaggerated and increases understated.

4. Data are affected by loan securitisations (where lending is transferred off the balance sheet to a special purpose vehicle or de-securitisations and loans removed from special purpose vehicles when lending is brought back onto the balance sheet), loan book transfers or acquisitions. The tables reflect the movements reported on the balance sheet, but underlying figures are quoted in the text, where these effects (indicated by footnotes to Table 4) have been removed, thus reflecting the underlying, or real business movements.

5. Statistical releases relating to the business of the MBBG are available on the internet in the News Room section of the BBA website.

6. The next MBBG release (to be issued on 30 April) will provide more detail on the banks mortgage lending and consumer credit, giving gross data and loan approval information.

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