Mortgage lending in the UK fell in December for the six month in a row, with gross borrowing levels 12 per cent lower than they were a year ago.
Figures published by the British Bankers Association this morning show that the total figure for mortgages stood at £10bn last month. House purchase approvals dropped 24 per cent on 2013.
For the year as a whole, however, mortgage lending was up, totalling £130bn compared with £110m in 2013. Despite the Mortgage Market Review creating a bottleneck in the early part of the year, 499,999 house purchases were approved, up nine per cent on 2013 when there were 459,000.
This is half the level seen during the peak of 2002.
Remortgaging dropped six per cent year-on-year and the number of loans approved for equity withdrawal fell to its lowest level yaer – just 81,000.
The UK's unsecured borrowing has also increased, and now stands at 3.8 per cent, the highest rate since late 2008.
Savings are also growing, largely thanks to changes to the Isa rules in July, which triggered net inflows of £9.3bn. In total last year £13.1bn was poured into Isas, 57 per cent more than in 2013.
Credit card borrowing continues to grow and ended the year up 5.6 per cent.
Richard Woolhouse, chief economist at the BBA, said: “The mortgage market has been softening since the spring, but for customers taking out home loans right now there are some great deals and we expect the market to begin to grow again this year.
“Robust employment data is making many of us feel more secure in our jobs and optimistic about our futures. That’s now feeding through to personal lending and credit card data, suggesting people are happy to finally replace the car or spend on household improvements.
“Outstanding business lending has been falling as larger firms have used the bond market rather than borrowing from banks. Despite this, outside real estate businesses are generally expanding their lending.”