26th May 2016

April 2016 figures for the high street banks

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

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Household borrowing

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

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Mortgage 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

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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

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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.