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Gross mortgage lending dropped slightly in May 2019 by 0.4% to £21.9 billion, compared with the same month in 2018, new figures from UK Finance show.

Two thirds of this lending (£14 billion) is by the high street banks and this is 3.5% higher than May 2018.

The number of mortgages for home purchase approved by the main high street banks in May 2019 was 49,683, a rise of 9.1 per cent year-on-year, and the highest level since June 2016.

Approvals for other secured borrowing at high street banks rose by 5.9 per to 9,712 but remortgage approvals fell by 3.7 to 30,579 over the year.

The £11.3 billion of credit card spending in May 2019 was 5.6 per cent higher than the same month in 2018. Repayments have remained in line with credit card spending, showing that consumers are managing their finances effectively overall, says UK Finance.

Personal borrowing through loans from high street banks in May stood at £1.7 billion, which is 9.3 per cent higher than the same month in 2018.

Lending through bank overdrafts was 3.2 per cent lower at £6.3 billion compared to May 2018.

Deposits held in the high street banks’ personal accounts and savings accounts were 1.2% higher year-on-year at £854.3 billion.

Richard Pike, Phoebus Software sales and marketing director, said: “Looking at these latest figures from UK Finance, and the upwards swing in the number of mortgage approvals for house purchase, it appears the market is moving again despite the ongoing political turmoil in the UK.

“The increase in credit card spending is something that we do need to be mindful of, but currently we can also see that consumers are so far keeping up with repayments of their debt.

“One wonders whether credit cards are being used to keep up repayments on other areas as well? We must not only consider levels of debt but future affordability if credit card spending keeps increasing”.

By Joanne Atkin

Source: Mortgage Finance Gazette

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