However, the significant falls in Bank Rate and the financial sector turmoil affected both lender and customer activity in November and December, so monthly movements were less indicative than usual of trends, the BBA said.
BBA statistics director, David Dooks, said: “This first opportunity to compare 2008 with 2007 shows that gross mortgage lending by the main high street banks totalled £170billion, some 23% below 2007’s total of £221billion.
“However, lending by the rest of the mortgage market was half the previous year’s total, showing how mortgage lending became much more concentrated during the year.
“The banks approved less than half the 2007 number of loans for house purchase, reflecting falling demand from households facing greater economic uncertainty and double-digit falls in house prices over the year which led to a wait-and-see mentality.
“Consumer credit was very weak in December as people reined in their credit card spending, despite early sales and heavy discounting by retailers. This consumer caution was also reflected in personal deposits, which rose strongly.”
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