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Mortgage approvals up while unsecured credit falls

Total net lending to individuals rose by £1.1billion in November, following the £0.5billion increase seen in October.
However, the 12-month growth rate remained at 0.7%, the lowest rate since comparable records began. The growth in lending is being driven by rises in secured lending; consumer credit fell once more in November, with a £0.4billion decline in the month. This represents the fifth consecutive net repayment but is slightly smaller than the £0.6billion repayment seen in October.

According to the cebr the better than expected rise in mortgage approvals continues the relatively gentle but sustained recovery in mortgage finance.

However, the monthly level of mortgage approvals remains far below pre credit crunch levels while bank and consumer caution remains evident as unsecured lending continues to fall back.

Going forward, last week’s Bank of England Credit Conditions Survey pointed to a stabilisation in unsecured credit availability and further steady increases in secured credit availability in the first quarter of 2010.

With underlying growth in household lending only steady, the cebr said it remained cautious over prospects for consumer spending in 2010.

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