UK Finance update on lending

Friday, 24 November 2017 09:56

Strength in remortgage activity amongst homeowners, alongside stronger first-time buyer numbers, are likely to have been the drivers of mortgage lending in October, as our estimate showed £23.1 billion borrowed, 14 per cent higher than a year ago. Two-thirds of this was carried out by High Street Banks, which translated to £15.3 billion. At 7.1 per cent, total amount of credit outstanding grew at a slower pace in October compared with the previous...Request free trial

Strength in remortgage activity amongst homeowners, alongside stronger first-time buyer numbers, are likely to have been the drivers of mortgage lending in October, as our estimate showed £23.1 billion borrowed, 14 per cent higher than a year ago. Two-thirds of this was carried out by High Street Banks, which translated to £15.3 billion.
At 7.1 per cent, total amount of credit outstanding grew at a slower pace in October compared with the previous month, while the growth in credit card borrowing remains strong, partly driven by the inflation rate. Growth in credit outstanding by High Street Banks was 5.1%, which also represents a slower pace than seen in September.
The latest figures from the High Street Banks suggest that businesses continue to exercise a cautious approach to borrowing with survey indicators showing demand for credit from smaller and medium sized businesses falling in the third quarter.

Commenting on the data, UK Finance’s Senior Economist Mohammad Jamei said:

‘The anticipated bank rate rise saw a flurry of remortgage activity as many homeowners took advantage of the competitive rates on offer. Borrowing was also boosted by stronger first-time buyer activity as this segment benefitted from good credit availability, lower rates and government housing schemes.

‘In terms of saving, consumer deposits grew at a slower rate in October, while businesses have continued the trend of bolstering their cash reserves amidst a cautious business landscape due to Brexit uncertainties.’

Ends

Notes to Editor

1. This release brings together data from High Street Banks previously published by the BBA, plus gross lending and mortgage market commentary previously published by the Council of Mortgage Lenders. You can access previous mortgage commentary here and high street banking data here.

2. Figures referred to as ‘High Street Banks’ in this release relate to the UK activity of 21 institutions across the banking groups of Barclays, HSBC Bank, Lloyds Banking Group, Royal Bank of Scotland Group, Santander UK, TSB and Virgin Money.