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Bank mortgage approvals drop 10% in 2010

Though lower this December, gross lending of £7.9bn was in line with the amounts seen in recent months.

Net mortgage lending increased by £0.9bn in December, the lowest increase since June 1999.

Mortgage repayments continued to be fairly strong in December reflecting more remortgage approvals in recent months.

House purchase approvals were marginally lower in December. The annual total of just under 400,000 approvals was some 10% lower than 2009.

The average value of house purchase approvals (£143,300) fell slightly but was 1.6% higher than a year ago.

Numbers of remortgage approvals in December were slightly stronger than the recent six-month average but for 2010 as a whole were some 7% lower than 2009. Approval numbers for equity withdrawal loans continued to be weak and for 2010 were some 12% lower than 2009.

BBA statistics director, David Dooks said:

"The main banks’ net lending rose by £20bn in 2010, in contrast to lending by all other lenders which decreased by around £12bn. However, mortgage demand was weak throughout the year, with 10% fewer loans approved than in 2009.

"Unsecured credit demand was also weak during last year, with net lending reducing by £2bn as households adopted a lower appetite for credit due to the uncertain environment for employment and the economy."

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