New mortgage lending reached a record £16.88bn during April, reflecting the strength of the housing boom, figures showed today.
Net lending, which takes into account redemptions and repayments, also reached a new high of £5.67bn last month, according to the Bank of England.
The net figure was 0.9% higher than March’s rise, and set the third new record for lending increases this year.
The jump, which was 10.9% above April 2001’s increase, pushed total outstanding mortgage debt to £613.35bn.
About 127,000 new loans were approved for house purchase during April, compared with an average of 114,000 in the first three months of the year, suggesting the buoyant lending levels are set to continue.
Today’s figures are in line with ones reported by the British Bankers’ Association earlier this week which showed total lending by the major banks during April was £11.46bn, while net lending reached a record £4.15bn.
Unsecured lending, which includes credit cards, loans and hire purchase agreements, but not mortgages, also raced ahead during April to reach a high of £16.29bn.
But credit card lending of £9.22bn was slightly below March’s figure of £9.67bn, though still well up on the April 2001 figure of £8.86bn.
Once repayments were taken into account unsecured lending rose by £2bn, the highest figure since December’s jump of £2.14bn, to give a total outstanding debt of £145.92bn.
Debt on credit cards rose by £707m after repayments, compared to a £604m jump in March, but down on December’s increase of £778m.
John Butler, an economist at HSBC, said: “This morning’s data provides further evidence that the consumer is showing few signs of slowing.
“Unemployment is still at historical lows, job uncertainty is starting to diminish, and wealth effects from house price gains are strong, and this data suggests that the recent appetite for consumers to borrow to sustain spending despite slower wage growth is unlikely to wane.
“Our view is that the MPC should be raising rates now but recent comments from committee members continue to suggest that they are likely to remain on hold for at least another month, thereby increasing the risk of falling behind the curve.”
EGi News 30/05/02
