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Mortgage Lending 'Looks Set to Remain Strong'
By Nicky Burridge, Personal Finance Correspondent, PA News
Mortgage lending looks set to remain strong into 2004, but other forms of borrowing are showing signs of slowing down, figures showed today.
The British Bankers' Association said the number of new home loans approved during December fell to their lowest level since January last year, as part of usual seasonal slowdown.
However, the group said the figures were stronger than in previous Decembers, with 8% more loans approved last month than in the same period of 2002, worth 26% more.
But at the same time growth in consumer credit was more subdued, and although people spent £8.22 billion on their credit cards in the run up to Christmas, outstanding debt rose by just £158 million after strong repayments.
Borrowing through loans and overdrafts increased by £510 million during the month, in line with the previous six month average.
David Dooks, BBA director of statistics, said: "With the number of loans approved remaining strong for the time of year, lending growth looks set to remain buoyant into the early part of this year.
"In contrast it is not clear whether consumer credit will follow suit.
"November and December rises in card borrowing were both subdued and, indeed, the annual picture shows overall consumer credit rising by less than in either of the two previous years, as consumers' preference to use secured borrowing options continue to substitute for traditional personal loans."
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