New mortgage lending halves
Monday 26th January 2009, 2:22PM GMT.
The number of new mortgages approved by banks last year halved as financing dried up.
The latest figures from the British Bankers’ Association (BBA) show in 2008, house purchase approvals were 52 per cent lower than in 2007.
Gross lending was £170 billion over the year, some 23 per cent lower than in 2007, the BBA said.
Approvals rose slightly in December to 22,051, from 17,339 in November, but this was “more likely to reflect delayed activity from November,” the BBA added.
BBA statistics director, David Dooks, said: “The banks approved less than half the 2007 number of loans for house purchase, reflecting falling demand from households facing greater economic uncertainty and double-digit falls in house prices over the year which led to a wait-and-see mentality.”
Net mortgage lending is expected to turn negative over 2009, with more people paying off their mortgage than borrowing.
Despite the traditional Christmas splurge, credit card spending was down in December compared to November, from £6.9 billion to £6.8 billion.
Consumers continued to pay off more than they put on their credit cards, with £7.3 billion of repayments made over the month.
Consumers also saved their cash over the month, with personal deposits in December rising by much the same as in November, taking the annual growth rate from 4.2 per cent to 4.7 per cent.
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