UK Mortgage Lending Dampens in Feb; Approvals Gain Momentum
London (ask4loan) March 28, 2007: As per British Bankers Association, U.K. mortgage lending declined in February for the third consecutive month. However, there is an increase in mortgage approvals.The gross mortgage lending was GBP16.636 billion in January, which became GBP14.949 billion. But it was higher than GBP14.028 billion in February, 2006. The total number of mortgage approvals for new home purchases is 54,659, where it was 42,804 in January and 57,385 in February 2006.
According to David Dooks, BBA Director of Statistics, "The U.K.'s shortage of housing market supply is clearly evident in the mortgage approvals data."
Mortgage approvals are considered a good indicator of future house price gains and activity. They suggest that demand is decreasing as prospective house buyers become careful.
Dooks said, "Demand appears to be moderating, however, as the monthly number of house purchase approvals was lower than a year earlier for the third month running and net lending was below trend in February."
According to BBA data, unsecured lending also remained dim; consumers made a net repayment of GBP157 million in February, as compared to GBP1.066 billion in January.
Other unsecured lending like overdrafts and unsecured loans declined GBP183 million in February, after a GBP189 million rise in January.