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24th September 2015 August 2015 figures for the high street banks

“People are putting their money into bricks and mortar while interest rates are low and the timing of a likely rate rise remains uncertain.

“Mortgage borrowing continues to pick up. The August increase is the largest in five years, although borrowing is still some way below pre-crisis levels.

“Remortgaging numbers also continue to be strong, as shrewd homeowners snap up competitive deals.”Richard Woolhouse, Chief Economist at the BBA

Key points:

  • Gross mortgage borrowing in August was £12.2 billion. This was 14% higher than a year ago and the largest increase since 2008. Net borrowing of £2.0 billion was the highest monthly rise since August 2010.

  • The number of mortgage approvals in August was 23% higher than a year ago, with remortgaging up 38% – at its highest level for four years – and house purchase up 16%. Existing borrowers are seeking fixed rates to control their mortgage costs, while market competition is also producing attractive deals for new buyers.

  • Bank lending to companies increased in August but continues to be subdued overall. Capital market finance has grown by £11.5 billion in 2015 so far, with larger companies using it as an alternative to loans and overdrafts.

Deposits into ISAs fell by £59m in August 2015. However, direct comparisons cannot be made with last year as the change to ISA limits in July 2014 led to substantial deposits in August last year of £1.5 billion. Overall personal deposits grew at an annual rate of 3.7%.

Annual growth in unsecured borrowing is at 5.2% with credit card borrowing growing at an annual rate of 5.1% and other unsecured borrowing (personal loans and overdrafts)
growing at 5.3%.

113th Brussels for Breakfast BBA

Gross mortgage borrowing was £12.2 billion in August, 14.3% higher than in the same month last
year and the highest increase since August 2008. After seeing slower demand in the second half of
2014, the overall mortgage stock is now 1.4% higher than a year ago.

BBA Chief Economist on February 2015 High Street Banking statistics

Monthly house purchase approvals are rising consistently. There were 16% more approvals
than in the same month last year.

Re-mortgaging approvals also increased in August and were 38% higher than August last year – at the highest level for four years - while other approvals were 31% higher than a year ago.

Approvals overall were therefore higher than in July and some 23% higher than at the same time
a year ago. 

Over the past two years, net borrowing through personal loans has been rising and has expanded
notably over the past two years. Increased demand for personal loans continues to reflect
better credit availability, lower interest rates on personal loans and stronger household finances.
Annual growth in high street banks’ credit card borrowing was 5.1% in August greater than in the
wider (all issuers) credit card market which grew at an annual rate of 4.5%.
In the wider (all issuers) credit card market, card use continues to rise. There were 218 million
purchases in August, with a total value of £12.1 billion. This spending volume was 8%
higher than in August 2014, and its aggregate value was some 4% higher.

Nearly 60 million credit cards are in issue, relating to 51 million accounts. 
About 67% of these were active at the end of August (i.e. carrying a balance relating to card spending and extended credit). About 42% of all balances in aggregate incur no interest at all.

Larger companies continue to make use of capital market finance in preference to
bank borrowing. They raised £11.5 billion in the first eight months of 2015.

The real estate sector has been actively reducing bank borrowing over the past three years and lenders have active programmes to dispose of property loans. Companies’ net borrowing increased by £0.9 billion in August boosted partly by short term borrowing and borrowing by the manufacturing sector.

Full BBA release can be downloaded here with references

Further Reading

Mortgage Update> lending hits eight-year high ,12 % Higher than 2014

Mortgage Lenders and Administrators statistics Bank of England Sept 2015
Right to Buy Homes Sales: April to June 2015 England Update 

property eCommerce is booming !

Scotland Housing Update September 2015

How low can you go ? speech by Andy Haldane BoE Chief Economist

Three Truths about Finance - Governor of BoE - Mark Carney

UK Housing Price Index JULY 2015

House price inflation gathers pace as market conditions tighten further August 2015 update

Help to Buy, has helped nearly 120,000 people achieve their aspiration of buying a new home since it was created, latest figures reveal