Total lending to individuals (excluding student loans) rose by £0.9 billion in July, compared to the previous six-month average increase of £0.8 billion. The twelve-month growth rate was unchanged at 0.7%.
Within total lending, lending secured on dwellings rose by £1.1 billion, compared to the previous six-month average increase of £0.8 billion. The three-month annualised growth rate was unchanged at 0.5% whilst the twelve-month growth rate was unchanged at 0.8%.
Gross lending secured on dwellings was £11.5 billion in July, compared to the previous six-month average of £12.1 billion. Repayments in July were £10.9 billion, compared to the previous six-month average of £11.5 billion.
The number of loan approvals for house purchase (47,312) increased in July but was lower than the previous six-month average (50,729). The number of approvals for remortgaging (25,273) also increased in July and was lower than the previous six-month average (28,649). The number of approvals for other purposes similarly rose in July (15,778) and was below the previous six-month average (18,035).
Consumer credit decreased by £0.2 billion in July, compared to the previous six-month average of £0.0 billion. The twelve-month growth rate was -0.6%. Within consumer credit, credit card lending decreased by £0.1 billion and other loans and advances decreased by £0.1 billion.
Paul Aitken CEO of borro, comments:
"Today's data from the Bank of England has revealed that lending to individuals rose by £0.9 billion last month and while it's encouraging to see things moving, there is a long way to go before we see lending at levels necessary to invigorate the economy.
"There is still a great deal of economic uncertainty at the moment in the UK, and household budgets continue to be squeezed. With the cost of energy on the rise, and mortgage rate hikes putting pressure on our wallets, we know that there is still demand for consumers to be able to quickly access finance - a demand that's not being met by banks and other traditional lenders. We have seen more and more people come to borro for that reason, as we are able to provide risk free finance within 24 hours against people's personal assets."
"Our own data has shown a significant increase in the number of people looking for alternative forms of lending; we have seen a 141% increase in funded loans for 2012 to date, compared to the same period last year."
Andy Knee, Chief Executive of LMS, also commented:
“Today’s Gross Lending figures show that mortgage market activity is starting to pick up after a quieter June and that Building Societies – who are offering innovative good value deals as they are finding it easier to raise funding – are starting to attract an increasing number of borrowers. This bodes well for the remainder of 2012 and suggests that the market is returning to a more healthy balance.
“However, remortgage activity is also a key part of the market and the LMS Remortgage Report highlights that people are doing this less frequently than before. Indeed, in 2008 people typically remortgaged every 3 years 7 months but this has risen to 4 years 5 months in July 2012.
“Now that we have seen more attractive deals becoming increasingly available and lenders are beginning to increase their SVRS, we believe that more people will start to refinance and we will see an increase in activity through to the end of this year.”
