2004 lending 'similar to 2003'

Analysis of the Major British Banking Group's (MBBG) lending figures by the BBA has shown that mortgage lending figures remained fairly unchanged last year compared to 2003.

Gross mortgage lending for December 2004 was £14.2 billion, a decrease of 3% from November and a 10% reduction for December 2003. However, an upturn in net lending to £5.2 billion in December brought the annual increase to £62.3 billion, which is virtually the same as in 2003.

Approvals fell noticeably in December to 134,700 loans amounting to a total value of £11.5 billion. This was down 14.5% on November and 29% on December 2003. The average approval for house purchase was £118,000.

David Dooks, BBA director of statistics, said, "Despite an upturn in net mortgage lending inDecember, in part reflecting a processing catch-up, the general slowdown in demand over the last six months saw lending in 2004 matching 2003's increase of £62.3bn. This time of year sees a seasonal weakness in loan demand, but with approval volumes running well below those in the same month a year earlier, mortgage lending is expected to remain relatively subdued in the near-term. The modest growth in banks' consumer credit lending over the month reflected the apparent weakness in consumer sentiment suggested by December's retail sales index."