Bank Loans Increase In July
Following several months of slow growth for people taking out new home owner loans and mortgages, July saw the amount of new gross lending from banks on home owner loans increase by 4.1 per cent. This figure has increased by more than four times since the month of June, when gross lending only increased by 0.9 per cent.
The figures come from the latest statistics from the British Bankers Association (BBA), and shows a total amount of new home owner loans worth £8.4 billion for the month of July, which although is slightly below the average figure for the previous six months, is well above the new lending figure for June.
Despite this positive news on gross lending, banks are still only seeing a slight increase in their total amount of net lending, as a growing number of borrowers continue to make extra efforts to repay their existing personal loans, home owner loans and other debts, whilst interest rates are so low and their loans are particularly cheap.
Although gross new lending stood at £8.4 billion for the month, net lending worked out at just £2 billion, due to the large amount of loan repayments and despite the increase in the number of new loan, this actually shows a decrease in net lending since June, when the figure was 2.1 billion.
David Dooks of the BBA commented on the figures, he said “The greater availability of properties for sale and slowing house price growth have not yet fed through to increased house purchase approvals.”
“Consumer credit outstanding continues to reflect high repayments together with pressure on household finances and job uncertainty while companies are tending to retrench and reduce their bank borrowing.”
