‘Mortgage lending rises steadily’

July 10, 2009 at 12:48 pm

The mortgage industry has taken a real battering over the course of the recent recession, with lending dropping enormously. However, signs of recovery were beginning to show through recently with the revelation that mortgage lending has just risen to a 13-month high.

Other findings of note in the statistics released by the British Bankers Association included the fact that in May the lending rate by the biggest banks in the UK rose to a 16% annual rate. This came as the number of mortgages for house purchases approved during the month reached 31,162. This figure was also up by 15.8% compared to May last year. It was also revealed that the value of the loans has gone up on average over the past half year.

However, it was not all good news. Despite the higher level of approvals during the month, it was also revealed that new mortgage lending only grew by £2.3 billion, which is actually the weakest rate of growth for a single month in the last eight years. On top of that, gross mortgage lending also dropped to £7.7 billion, which is also the lowest level in the last eight years.

The majority of lending to other businesses was also down in general, and in fact the only business lending that had actually gone up was to public bodies.

So despite the initial good news, it actually looks like things still have a long way to go in the mortgage industry before a real recovery is on the cards.

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