Mortgage lending reduced

Fri, 28 Sep 2007

Consumer credit is low and mortgage lending has also reduced over August, according to the latest set of statistics.

The British Bankers' Association has found that mortgage approvals were 8.8 per cent lower last month when compared with August 2006, although the average amount borrowed rose by nine per cent to £153,800.

Director of statistics at the association David Dooks comments that more homeowners were remortgaging their properties, with a four per cent increase recorded.

"Other than the current spate of remortgaging, loan approval numbers also endorse our view that customer demand was starting to moderate even before the September difficulties in the financial markets," he remarks.

Consumer credit was also subdued, according to Mr Dooks, as credit card, personal loans and overdraft borrowing also decreased.

Lending on personal loans and overdrafts fell by 11 per cent compared to last year, the British Bankers' Association said.

Paragon revealed yesterday that landlords have reduced the gearing in their portfolios to protect themselves from rising borrowing costs .

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