Further evidence that the housing market is slowing down emerged today as the Bank of England reported a fall in mortgage approvals during August.
Figures from the Bank showed that 108,000 loans were approved for house purchase last month, down from an average of 116,000 in the three months to the end of July.
It said the number could have been affected by the number of working days during August, but added that even once this had been taken into account approvals would still have been lower than the recent average – at 111,000 compared to 117,000.
Total mortgage lending also fell, with £18.66bn advanced in August compared to £19.04bn the previous month.
Once redemptions and repayments are taken into account, mortgage lending rose by £6.67bn, also down on July’s jump of £6.91bn.
The figures are in line with those released by the British Bankers’ Association, which measures lending by the major banks, showing the number of mortgages approved during August fell by 10% from July’s figure, while total mortgage lending fell slightly to £14.3bn from £14.5bn.
But despite the month-on-month fall, year-on-year mortgage lending remained strong, according to the Bank’s figures.
Total lending of £18.66bn was well up on August 2001’s figure of £14.52bn, while net lending was a third higher than the £5.01bn for the same month the previous year.
During August Britons borrowed £16.49bn through loans, credit cards and overdrafts, broadly in line with July’s increase.
But weaker repayments meant outstanding unsecured debt rose by £1.99bn,compared to £1.94bn the previous month.
People spent a total of £9.86bn on their credit cards last month and after repayments are taken into account total credit card debt rose by £812m, compared to £683m the previous month.
Britons now have a total of £45.27bn of credit card debt.
EGi News 30/09/02
