May mortgage lending rises

MORTGAGE approvals rose in May to 36,709 to their highest level so far this year but they were still far below the 27-month high of 45,758 hit last December, fresh monthly data from the British Bankers’ Association (BBA) revealed yesterday.

Net mortgage lending picked up to £2.6bn in May from a nine-year low of £1.8bn in April but this was still low on a historical basis.

Lending to non-financial companies fell by £1.3bn in May following a decline of £1.2bn in April, slightly below the average monthly fall of £1.6bn over the previous six months.

The BBA figures also showed that net consumer credit fell by a further £71m in May after a drop of £347m in April, the fourteenth net repayment in consumer credit. However, credit card lending rose by £171m in May.

IHS Global Insight’s Howard Archer said: “The further net repayment in consumer credit in May is the consequence of an ongoing desire of consumers to reduce their debt in a still very uncertain and somewhat troubling economic environment and the looming major fiscal squeeze, as well as low consumer appetite for new borrowing and a limited availability of unsecured credit from banks.”