Mixed picture in December lending figuresMortgage lending remains low

30 January 2009

How to pay for Christmas

Overall lending was up in December according to the latest figures from the Bank of England, but down on the previous six months. 

The number of new mortgage approvals was also down over the last six months,although the figures were a rise on November. 

Remortgages also showed an increase.

Commenting on the figures, Adrian Coles, director general of the Building Societies Association, said: 'House prices are widely expected to fall further and unemployment is rising, so potential buyers remain cautious and are staying out of the market as they wait for it to stabilise.

'Despite the Bank of England's official rate being reduced to 2% in December, building societies were able to attract funds by providing competitive interest rates on savings accounts and being trusted as a safe place for deposits.

'December's figures could also have been boosted by deposits made from compensation paid to customers of the failed Icelandic bank Icesave.'


The increase in total net lending to individuals in December, was higher than the November increase. But again it was below the previous six month average.

There was also a slowdown in the amount of consumer credit with credit card lending down by £0.1 billion. 

The overall annual growth of consumer credit also continued to slow to 5% despite the spate of high street discounts in December and over Christmas.


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