Mortgage lending flat in July, says BBA
Demand for both business and household borrowing remains weak as the economy continues to grow slowly, the British Bankers' Association has suggested.
Gross mortgage lending was unchanged in July from the previous month at 7.6 billion, eight per cent lower than the total in the same month last year, the organisation stated.
This followed an 11 per cent drop between May and June.
Meanwhile, house purchase approvals increased in July compared with June and were slightly higher than a year ago.
The average value was two per cent higher than a year earlier at £151,500, while the number of remortgage approvals was up 14 per cent.
Among non-financial companies, debt repayment was matched by further
borrowing, although demand remained subdued across many industries, the report said.
Commenting on the figures, BBA statistics director David Dooks said: "Overall, companies' appetite for finance remains low, reflecting business decisions in difficult trading conditions - new finance made available to one company is simply being offset by debt repayment from another.
"Demand for borrowing from both households and companies continues
to be weak reflecting the slow growth in the economy," he added.
Chris Gardner of mortgage website Obligo.co.uk said many homeowners are finding it hard to turn down the fixed-rate offers on the market at present.
"People are aware that the mortgage market could rapidly turn against them in the current climate and so are remortgaging now while rates are so favourable," he remarked. "Some of the two and five-year fixed rates on the market right now are too hard to resist."
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