After allowing for the seasonal upturn, the mortgage and consumer credit picture remained unchanged last month. There seems little sign of any dramatic change in trend, says the British Bankers’ Association, although the number of loans approved for house purchase strengthened appreciably and there was a noticeable shift upwards in the average value.

Following last week's MBBG net lending figures released by the BBA, further information now available on lending to individuals shows that:

• June saw gross mortgage lending total £14.9bn. A good proportion of this represented remortgaging activity because when redemptions and repayments are stripped out, the resulting rise in net lending was £5.3bn (seasonally adjusted).
• In total, there were 256,600 mortgage loans approved in June, for a combined value of £18.6bn. Last June's figures were distorted by the Jubilee and the World Cup, so annual comparisons are not informative, but the usual seasonal strengthening of loans approved around this time of year is apparent. The average house purchase loan value was noticeably higher, at £102,900, some 13% higher than a year earlier.
• Total consumer credit rose by £0.8bn net in June, roughly in line with the recent monthly average.

David Dooks, director of BBA statistics, said: "June is usually influenced by higher summer mortgage lending activity, and this year is no different.”

“After allowing for this seasonal upturn, there seems little sign of any dramatic change in trend, although the number of loans approved for house purchase strengthened appreciably and there was a noticeable shift upwards in the average value.”

“On consumer credit, the inter relationships between current accounts, credit cards and personal loans produce offsetting movements between products, though overall, June's rise in unsecured lending to individuals was consistent with the trend."

Mortgage Lending

Gross lending totalled £14,932mn in June, only 1% more than in May.

June's seasonally adjusted rise in net lending, of £5,250mn, followed a relatively weak figure in May (+£4,606mn); the average of the two months was slightly below the average of +£5,060mn over the previous six months.

Compared to June 2002 (when demand was significantly lower because of the Jubilee and World Cup), there were 6% more loans approved for house purchase (21% by value), 33% more re mortgages (+54% by value) and 50% more equity withdrawal loans (+56% by value).

Consumer Credit

New borrowing on credit cards totalled £6,897mn in June. Following May's strong seasonally adjusted increase in net lending of £523mn, June's increase was just £208mn.

New lending on personal loans and overdrafts totalled £3,404mn, 18% more than in June last year. After seasonal adjustment, net lending rose by 625mn in June compared with a below average figure of +144mn in May.