UK Mortgage Lending Lowest Since 2001

It seems UK banks and building societies are only lending marginally faster than existing mortgages are being redeemed, reflecting far stricter lending criteria.

The annual growth in the banks’ net mortgage lending was 3.5% in October, substantially ahead of the 0.8% for the whole mortgage market in September, according to the British Bankers’ Associaiton.

Gross mortgage lending of £7.6bn in October is the lowest total since February 2001. This is 16.1% lower than a year ago.

Net mortgage lending increased by £1.7bn in October compared to £3bn in the same month in 2009.

The banks are insisting that they are ready to lend and that it is actually demand which has fallen. This is perhaps true, however it is more likely that the figures illustrate just how out of control mortgage lending had become before rational criteria for borrowers were reinstated!