February's mortgage lending figures indicate that the declining trend seen during 2004 may be bottoming out.

Following last week's release of MBBG net lending figures for February, further information now available on lending to individuals shows that:

• Gross mortgage lending was £11.9bn in February. This was 3% higher than January but 12% lower than February 2004.
• Seasonally adjusted net mortgage lending (gross lending minus repayments) rose by £4.8bn compared with £4.2bn in January and £5.3bn in February 2004. This compares with an average of £4.4bn in the previous six months.

There were 158,391 approvals (for all purposes) in February for a total value of £13.1bn. In volume terms, these were 22% higher than January but 25% weaker than February 2004. Loans approved for house purchase in February were 42% higher than January's very low figure, but still 35% lower than February 2004. The average approval for house purchase was £119,000.

Growth in overall net consumer credit (£0.7bn, seasonally adjusted) weakened in February. The increase in loans and overdrafts (+£0.7bn) was slightly above the recent monthly average of £0.6bn, while credit card borrowing (£0.1bn) was noticeably weaker than both January and the previous six months' average.

David Dooks, BBA director of statistics, said: "Whilst mortgage lending is clearly running at levels below those a year earlier, February's figures indicate that the declining trend seen during 2004 may be bottoming out."

"We have seen the start of the seasonal upturn in loan approvals, albeit from a very low point in the case of house purchase loans, so it will be important to see how strong the usual Spring impetus will be in the coming months."

"Very weak growth in February's credit card lending was driven by consumers' lower spending, virtually identical in value to February 2004 and in line with slower reported retail sales".

Mortgage Lending

February's gross lending of £11,938mn was higher than Januarys total (£11,642mn) and compared with £13,538mn in February 2004.

Net mortgage lending rose by £4,798mn, compared with £4,170mn in January. The February rise was stronger than the average of £4,528mn in the previous six months, although the annual growth rate declined slightly to 13.4%.

Compared to the same month a year earlier, February's approvals of house purchase loans were 35% lower by number and 26% lower by value; remortgaging loans were 7% lower by number but 5% higher by value; and equity withdrawal loans were 33% lower by number and 28% lower by value.

Consumer Credit

New borrowing on credit cards totalled £6,832mn in February. This was well down on the average of the previous six months, and with repayments closer to their long term trend, a seasonally adjusted increase in net lending of only £69mn resulted; well down on the recent average (+£306mn).

New lending on personal loans and overdrafts, at £2,858mn, was slightly lower than January and also lower than the average for the previous six months (£3,055mn). After seasonal adjustment, the rise in net lending of £667mn was higher than the average rise of £564mn over the previous six months.