Mortgage approvals continue to rise

The banks' net mortgage lending of £2.3bn was the weakest monthly rise since early 2001, although mortgage approvals continue to increase, according to the British Bankers’ Association (BBA).

Personal deposit inflows continue to be weak and consumer credit growth is minimal. Lending to financial companies rose marginally while lending to non-financial companies was little changed overall.

BBA statistics director, David Dooks, said of the latest data: "Steady monthly increases since last November have seen the number of loans approved for house purchase recover to levels seen in early 2008, although gross and net mortgage lending show a subdued wider mortgage picture. However, unlike much of the mortgage market, the high street banks are still seeing lending growth and improved mortgage availability is reflected in higher average loan approval values.

"Consumers' borrowing appetite remains weak, reflecting uncertainty over household circumstances, so credit growth is negligible and spending activity on credit cards is down on this time last year. Lending to non-financial companies was little changed overall in May."