February mortgage lending highest on record

Gross mortgage lending had its highest February ever at £24.6 billion according to the Council of Mortgage Lenders.

Although lending was down by 7% on the £26.6 billion recorded in January, it is up by 9% on the £22.5 billion of lending in February last year.

Commenting on today's data, CML Director General Michael Coogan said: "This is the highest February lending figure on record, and reflects the continuing strength of the market and the strong desire of many people to get a foot on the property ladder or move house. Recent speculation about whether or not interest rates will go up seems to have had little impact upon lending levels and we still expect gross lending to reach around £360 billion this year."

British Bankers' Association (BBA)

Latest figures from the Major British Banking Groups, for February 2007, show that:

Total sterling lending to the UK private sector showed a net underlying increase of £9.5bn (+0.7%) to £1,297bn. This compares with an underlying rise of £20.7bn in January and an average of £12.6bn over the previous six months.

Net mortgage lending rose by an underlying £5.2bn. This was lower than both the increase of £5.4bn last month and the monthly average of £5.7bn over the previous six months. Unsecured personal lending fell by £0.2bn in February, compared with a fall of £0.3bn in January. Loans & overdrafts accounted for all of the fall, with credit card borrowing unchanged.

There was a strong lending increase to real estate companies (+£1.9bn) and lending to construction rose by £0.3bn, although there were decreases in lending to cold water supply companies (-£0.3bn), wholesale & retail trade (-£0.3bn) and agriculture & fishing (-£0.2bn).

Deposits from the private sector rose by £10.3bn (+1.1%) to £950bn. Personal deposits increased by £3.2bn, slightly higher than the average growth of £3.0bn over the previous six months.

David Dooks, BBA director of statistics, said: "Since last November, when mortgage lending peaked, we have seen three successive months of mortgage lending rising by less than in the previous month, with Februarys rise below the recent trend, suggesting a moderating demand in the market.

Consumer appetite for credit remains very subdued. Credit card borrowing was flat in February following recent falls and there was little personal loan demand."

Analysis of MBBG sterling lending to UK public and private sectors

Lending to individuals (after allowing for the effects of securitisations, loans acquired from special purpose vehicles, transfers, acquisitions, etc)

Total net lending rose by an underlying £4,979mn in February, compared to £5,116mn in January and £5,656mn in February 2006. Of the total rise, mortgage lending accounted for an underlying £5,170mn, compared to Januarys rise of £5,434mn. Consumer credit fell by £187mn overall; personal loans & overdrafts fell by £183mn compared to Januarys rise of £189mn, while credit card lending fell by £4mn compared to a fall of £495mn in January and an average monthly fall of £239mn over the previous six months.

Lending to financial firms

Lending to financial companies rose by £3,044mn in February with an increase in net lending to other financial intermediaries of £2,770mn.

Lending to non-financial firms

Lending increased strongly to real estate companies (+£1,924mn) and to construction (+£262mn), while lending to cold water supply declined by £270mn, to wholesale & retail trade (-£319mn) and to agriculture & fishing by £152mn.