BBA statistics show continued mortgage strength

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Mortgage provision remains "robust and stable" according to new figures published by the British Bankers Association (BBA) today.

August saw gross lending of £20.9 billion, up nine per cent on July and a 24 per cent increase over the year.

BBA director of statistics, David Dooks, said: "Record gross and net mortgage lending is a reflection of house prices and mix of loans, rather than increased volumes."

He noted that secured loans in general have seen a trend "towards house purchase rather than for other purposes".

Howard Archer, chief UK and European economist for consultancy firm Global Insight, believes that "house prices will increasingly be reined in by affordability constraints and will settle down into an extended period of relatively modest rises".

Mr Archer added that while lending itself remains high, new mortgage approvals are "substantially below the levels seen in May and June", blaming the dampening effect on financial pressures from Augusts interest rate rise.

He proposed that with rates expected to climb again in November, support from high employment and a healthy economy could be outweighed.

The BBAs announcement follows net lending figures for August, published last week by the Major British Banking Groups, which collectively account for two thirds of all mortgages in the UK.

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