Mortgage approvals rise againCredit card spending falls

24 June 2009

Latest figures from the British Bankers' Association (BBA) indicate that the modest recovery in the housing market is continuing.

terrace of houses

The number of approvals for house purchases rose to 31,162 in May, up 15.8% compared with the same month a year ago.

It is apparent that recent drop in house prices and low interest rates has tempted some people back into the housing market.

However, mortgage lending remains subdued. Net new mortgage lending, of £2.3bn in May, was again at its lowest level since March 2001, having fallen from £2.5bn in April.

Credit card spend is down

BBA data also shows that borrowing on credit cards has dropped owing to householders' economic uncertainty. Spending on credit cards was down 11.4% on a year ago.

The mixed picture is for various reasons. BBA statistics director David Dooks argued that High Street banks were loosening their lending constraints and offering mortgages to people who did not have a large deposit to give.

But he said that consumers' appetite to borrow had been hit by uncertainty over jobs, house prices and the state of the economy in general.

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pound coins

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