UK Mortgage Lending Rises in November, Says BoE
Net lending to consumers in the United Kingdom rose by £1.1bn (US$1.77bn) in November from a month earlier with mortgage funding spearheading the charge, according to a monthly lending report by the Bank of England, in an indication of continued economic stabilization, according to a leading trade body. Even as lending by building societies remained steady from October in the face of this positive development, according to a separate report by the Building Societies Association (BSA), the firm's director general cautions that credit will continue to be restricted into the New Year. The number of loan approvals for house purchases rose to 60,518 approvals with loans worth £8.3bn in November, from 57,718 approvals (worth £8.1bn) in October, while the BoE stats show net lending secured by dwellings rose by £1.5bn in November, while consumer credit slipped £400m. Approvals for remortgaging stayed nearly level at 24,897, from 24,513 the previous month, but the value of the approvals slipped to £3.1bn from £3.2bn. Gross mortgage lending by building societies slipped to £1.6bn from £1.7bn in October, according to monthly commentary by the BSA, the trade group representing the small community bankers and mortgage lenders - similar to credit unions in the US. But the drop from October to November is typical, BSA said. And when seasonal factors are taken into account, the monthly difference disappears and November's seasonally adjusted £1.5bn of gross mortgage lending comes in level with October. “Although the housing market has stabilized slightly in recent months following the drop in activity at the start of the year, lending is still at lower levels than a year ago," said BSA director-general Adrain Coles. "Funding conditions for all lenders are improving slowly, but these are still acting as a brake on lending, as is the relatively small number of properties coming to market. Lending activity is likely to remain relatively depressed in 2010 until funding and supply conditions improve.” Write to Diana Golobay.