Mortgage lending flat as house sales stall
Mortgage lending remained subdued during July as the housing market failed to pick up, figures showed.
Lending by the major banks fell to its second lowest level since February 2001 of £1.95bn, once redemptions and repayments were stripped out, according to the British Bankers' Association.
The market also showed little sign of picking up, with the number of mortgages approved for house purchase dropping for the second month in a row.
A total of 33,698 loans were in the pipeline for people moving home, 2.5% less than in June, and well down on the recent high of 45,415 reached in December.
The group said although the abolition of home information packs had reportedly led to more properties being put up for sale, there had not yet been any obvious impact on the number of people buying a house with a mortgage.
David Dooks, director of statistics at the BBA, said: "The greater availability of properties for sale and slowing house price growth have not yet fed through to increased house purchase approvals."
His comments were supported by figures released by HM Revenue & Customs, which showed 90,000 properties worth more than £40,000 changed hands in July, only slightly up on the 86,000 sales completed in June.
While the figure is nearly double the 50,000 transactions reported in January, it remains well down on levels seen before the credit crunch struck.
However, the BBA's figures contrast with ones reported by the Council of Mortgage Lenders for July, which showed total mortgage advances rising for the third consecutive month to £13.6bn - the highest level for a year.
However, the CML said the total was still lower than in July 2009, and it warned lending levels were likely to remain subdued for the rest of 2010.
The Council of Mortgage Lenders has revised down its forecasts for total mortgage lending for this year to £140bn, compared with £150bn previously, and slashed its net lending prediction to £12bn, down from £15bn.