The BBA is now integrated into UK Finance. Please go to www.ukfinance.org.uk for new content and updates from UK Finance.
Material published by BBA prior to 1st July 2017 is still available on this website.
From 1 July 2017, the finance and banking industry operating in the UK will be represented by a new trade association, UK Finance. It will represent around 300 firms in the UK providing credit, banking, markets and payment-related services. The new organisation will take on most of the activities previously carried out by the Asset Based Finance Association, the British Bankers’ Association, the Council of Mortgage Lenders, Financial Fraud Action UK, Payments UK and the UK Cards Association.x
Dr Rebecca Harding, BBA Chief Economic Advisor said: “As expected, growth in mortgage lending has fallen back sharply on last month proving that March’s results were just a Stamp-Duty spike. Net mortgage borrowing is nevertheless 3% higher than a year ago.
“Separately, the fact that personal deposits are growing while ISA deposits continue to disappoint suggest consumers are using easy-access savings while the outlook for the economy remains uncertain. The increase in real wage growth may start to have positive knock-on effects on long-term savings if it is sustained.”
Annual borrowing growth rates
Gross mortgage borrowing of £12bn in the month was 12% higher than in April 2015. As expected, this was a slower month, following the inflated lending activity associated with borrowers completing purchases ahead of the stamp duty increase.
Net mortgage borrowing is running around 3% higher than a year ago.
Consumer credit continues to show annual growth of about 5% reflecting improved confidence and in the case of personal loans and overdrafts favourable interest rates.
Number of approvals
House purchase approval numbers have resumed a downward trend after seeing increased activity during the three previous months which were influenced by the stamp duty change.
Numbers were some 6% lower than in April 2015.
Remortgaging approvals were 16% higher than in April 2015.
Other advances were 25% higher than a year ago.
Business borrowing annual growth rates
Borrowing by non-financial companies
Borrowing by non-financial companies increased by £300mn in April. This was similar to the growth in March and was the fourth consecutive month to show an increase.
Capital market issues by non-financial companies reduced by £1.7bn in April but in the year to April, a total of £21.9bn (net) has been raised. This alternative finance compares with a reduction in bank borrowing of £0.2bn (net) over the same period.
Trends in net deposits
Personal deposits have been growing more strongly in recent months and annual growth has risen to 4.8% in April.
ISA deposits only grew by £3.0bn over the March and April investment period, compared with £6.2bn in the same period of 2015.
Non-financial companies deposits increased by an average of around £2-3bn a month in 2015 but have fallen back in the first four months of 2016, taking their annual growth rate down from around 10% in 2015 to about 4% now.