LENDING to businesses is rising sluggishly while the latest mortgage lending figures showed yesterday that the new regulatory efforts are helping to cool the growth of credit for housing.
Figures from the British Bankers’ Association (BBA) indicate that business lending has barely budged from its position a year ago, rising by only 0.3 per cent, with net borrowing at £1bn, excluding lending to firms for property.
At the same time, the number of mortgage applications for house buyers fell from April’s 41,934 to 41,757.
But the number of mortgages approved for purchases is up significantly from 36,102 in May last year. Gross mortgage borrowing was up by 26 per cent on May last year, to £11.1bn.
The figures come ahead of a decision from the Bank of England’s financial policy committee tomorrow, when officials will decide whether the put more restrictions on mortgage lending, particularly in the heated London market.
A report released today by housing charity Shelter indicates that 99.7 per cent of homes being sold in the capital are now out of reach for first time buyers on average wages. The researchers say that with a typical first time buyer mortgage of £121,500, and a deposit of £26,000, there are currently fewer than 100 homes for sale in the capital.