Money News
Following last week's release of MBBG (Major British Banking Groups) net lending figures for January, further information now available on lending to individuals reconfirms that current consumer credit is weak. New borrowing on credit cards totalled £7.239 billion; 7% lower than January 2006. After seasonal adjustment, net lending decreased by £496 million.
However, new lending on personal loans and overdrafts last month was higher than in December and, after seasonal adjustment, net lending rose by £226 million (revised) compared with a recent monthly average of £330 million.
Meanwhile, on the mortgage lending front, net loan approvals reported in January (particularly for house purchase) were lower, partly due to a higher than usual number of cancellations of expired approvals. When compared to January 2006 and allowing for one-off cancellations, house purchase approvals were down 1% by number and up 16% by value.
Remortgaging approvals were down 6% by number and up 8% by value; whilst approvals for equity withdrawal were 10% higher by number and 9% higher by value.
There was an underlying total of 141,200 mortgage approvals (for all purposes) in January. Due to the one-off removal of around 7,000 long-outstanding approvals, the reported number, which gives a slightly false impression, is lower, at 134,200, with an aggregate value of £13.1 billion. The average loan approved for house purchase was £146,700, some 16% higher than a year earlier.
Underlying net mortgage lending (gross lending minus repayments and redemptions) rose by £5.6 billion, in line with the recent average, compared with December's increase of £5.7 billion. The annual growth in net mortgage lending continued at around 14%.
27 February 2007 © Moneyextra.com
Moneyextra.com recommends you should consider taking independent financial advice before acting on any article. Please contact us for help with your individual circumstances if any assistance is required.