Lending and repayments hit record high

The levels of mortgage lending by banks hit a record high of ?14.5bn in July, said the British Bankers' Association (BBA) today, while repayments of this debt were also at an all-time high.

The number of mortgage loans approved in July was up 16% on the previous month, but the BBA added that these record lending figures are likely to be at least partly explained by the lower demand in the Jubilee-affected June.

The value of loans approved for remortgaging and equity withdrawal both reached record levels, while the average loan value of ?88,000 was 2% lower than in June but 14% higher than a year ago.

The figures back up last week's findings by the Council of Mortgage Lenders, which announced that lending by its members had reached a record ?21.8bn in July.

"At first glance, July's figures appear very strong, but allowing for the effect of the Jubilee holiday in June and assessing the two months together, it suggests that demand, though buoyant, is not continuing to escalate from the peak seen in May," said BBA chief executive Ian Mullen.

"Strong levels of new personal borrowing on cards and loans were matched by repayments and the signs are that people are still borrowing within their means."

The figures follow a raft of recent reports from mortgage lenders and estate agents suggesting that the housing market may be slowing, a factor which could result in a slowdown in mortgage lending.