Gross mortgage lending in October hit £8bn, 4% higher than the same month last year, latest figures show.
The figure was only slightly weaker than the £8.4bn lent in September this year. But the statistics from the British Bankers Association show net lending increased by just £0.9bn in October, something the trade body attributes to the high level of capital repayment taking place.
House purchase approvals were higher than in September and 16% higher than in October 2010. The average value (£145,400) was similar to a year ago. The number of remortgage approvals was higher than in September and 3% higher than in October 2010.
The BBA says approvals for other forms of secured lending are stable, as homeowners use the equity in their homes as security for borrowing.
David Dooks, BBA statistics director, said: “The mortgage market, where the high street banks provide around 70% of new lending, remains subdued and demand for unsecured borrowing is slow, reflecting householders’ caution in the current economic environment.”
“Property-related companies and hotels and restaurants were the last industrial sectors to cut back their borrowing throughout 2009 and 2010 and there may be signs of those sectors emerging first. The level of borrowing by hotels and restaurants is now higher than it was a year ago.”
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