Mortgage lending
slumps a fifth in May
LONDON (ShareCast) - Tougher
lending criteria, higher
food costs, rising fuel
prices and soaring utility
bills caused a slump in
mortgage lending last month
to its lowest level since
records began more than
a decade ago.
New mortgage approvals
sank to less than 28,000
in May from 34,752 the month
before, according to the
British Bankers' Association
(BBA).
That's a 20% slump on the
month and a 56% plunge on
the same time a year ago.
The figures also revealed
that net mortgage lending
dropped to £4bn during
the month from £5.2bn
in April.
"Measures of mortgage
activity were lower in May
as a result of tighter lending
criteria and economic pressures
on households," said
BBA statistics director,
David Dooks.
"Only remortgaging
business is holding up,
where people need or want
to take advantage of deals
with other lenders."
The number of homeowners
remortgaging fell just 8%
from April's 68,971 and
10% weaker than a year ago.
"People spent more
on credit cards, but repayment
levels were lower than expected
in May and after April's
busy month with people putting
money into ISAs, personal
deposits were not as strong,"
said Dooks.
