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Economy in Brief

BBA Data Show Tentative Firming in UK Mortgage Lending; Consumer Credit Still Soft
by Carol Stone May 27, 2005

British Bankers Association data on lending to individuals have recently been added to Haver's "UK" database. The April figures were reported today and updated by our "European shift", the manager and crew who work from roughly midnight in New York to 8:00AM.

Gross new mortgage lending gave a tentative sign of stabilizing after a period of deep weakness during the winter. New loans totaled £14,120 million, up 2.9% from March, although still 12.6% below the April 2004 amount. The number of loans approved for house purchase, 69,323, was off 21.0% from a year ago, but this is the smallest 12-month decline since last August. Intervening months have seen 30%-40% rates of decline.

The average value of newly approved loans has been increasing, but more slowly in recent months. The April figures show a 10.7% rise from a year ago. This is stronger than several months of single-digit increases since last summer, but weaker than the 15%-20% gains prior to that. This general tapering trend is reflected in house prices, with the Halifax Standardised Price, for example, virtually flat for the first four months of 2005. The UK housing market appears to have cooled, and other data on the industry have turned in a mixed, basically indeterminate performance so far this year.

The BBA figures on consumer credit show weakness. The amount of new credit card debt was £7,064 million in April, down 7.2% from a year ago. More, the total amount of credit card debt outstanding fell by a seasonally adjusted £40 million in April, the first monthly decline since August 1994. The recent sluggishness coincides to a decline in UK retail sales of 2.7% in value since September.

The BBA lending data are cited in two sections of our UK database, both in "Financial Data" and also in "Housing and Construction". They cover several "major banking groups", the so-called "MBBG" and are styled to parallel some similar concepts reported by the Bank of England for all banks, building societies and other mortgage lenders. Those broader data are due for release on Wednesday 1 June.

Monthly Averages
United Kingdom
Mil.GBP  (NSA except where noted)
Apr 2005 Mar 2005 Feb 2005 Year Ago
2004 2003 2002
Gross New Loans 14,120 13,721 11,938 16,150 15,701 15,071 12,586
Loan Approvals- Number 69,323 65,635 47,365 87,800 69,244 76,105 83,915
- Average Value (£) 122,700 121,600 119,000 110,800 112,083 97,817 87,367
  - 12-mo. % change       10.7 14.6 12.0 14.3
Credit Card Debt- Gross 7,064 7,586 6,842 7,610 7,707 6,818 6,105
- Outstanding EOP 34,015 33,628 33,728 31,139 33,973 28,689 26,409
- Net Change SA -40 134 50   388 310 266
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