Guardian Unlimited : Mortgage lending increased by £1bn in November as confidence in the housing market began to return, figures out today revealed. However, consumers remained cautious about taking on unsecured debt, and the amount borrowed on credit cards was £0.3bn less than in the previous month. The figures from the Bank of England showed that when repayments where taken into account, individuals borrowed a total of £9.6bn during November - £0.7bn more than in October and £0.8bn more than the average recorded over the previous six months. Of this, £8.7bn was secured on property - an increase of 10.3% on the figure for November 2004 and 0.9% up on October's figure.
The value of home loans approved was also up on the previous month, driven by an increase in the number of mortgages offered to homebuyers. The number of loans for buyers was up 2,000, at 115,000 to its highest point since May 2004, and the value of those loans reached £14.6bn. Meanwhile 107,000 remortgages were approved, with a total value of £11.5bn. These figures were slightly lower than those recorded in October. However consumers' appetite for credit other than mortgages showed signs of weakening during November, with net lending £0.3bn lower than the previous month at £0.9bn.
This was the result of the fall in credit card borrowing, as lending in the form of personal loans, overdrafts and other forms of consumer credit remained in line with October's figure. According to the Royal Institution of Chartered Surveyors (Rics), the Bank's figures show a level of mortgage approvals above the average for the last decade and a year-on-year increase in approvals not seen since December 1982. It said the evidence of renewed interest offered by the mortgage approval numbers was backed up by its November housing market survey, which found an increase in the number of would-be buyers making enquires for the sixth consecutive month.
"With interest rates likely to fall further in the next few months, we expect current firm market conditions to be maintained," Rics said. "As a result, mortgage approvals are likely to hit 1.33m in 2006 compared to an expected total of 1.2m for 2005, but still below the 2002 level of 1.42m."
Howard Archer, chief UK economist from consultancy Global Insight, said the figures were further evidence that the housing market was "relatively healthy" and that this would prevent price falls. He added: "Very muted consumer credit growth in November indicates that consumers are still cautious overall in their behaviour.
"This is also reinforced by reports that consumer interest in the post-Christmas sales appears to have diminished fairly quickly away after a relatively strong start."
Guardian Unlimited © Guardian Newspapers Limited 2006
The value of home loans approved was also up on the previous month, driven by an increase in the number of mortgages offered to homebuyers. The number of loans for buyers was up 2,000, at 115,000 to its highest point since May 2004, and the value of those loans reached £14.6bn. Meanwhile 107,000 remortgages were approved, with a total value of £11.5bn. These figures were slightly lower than those recorded in October. However consumers' appetite for credit other than mortgages showed signs of weakening during November, with net lending £0.3bn lower than the previous month at £0.9bn.
This was the result of the fall in credit card borrowing, as lending in the form of personal loans, overdrafts and other forms of consumer credit remained in line with October's figure. According to the Royal Institution of Chartered Surveyors (Rics), the Bank's figures show a level of mortgage approvals above the average for the last decade and a year-on-year increase in approvals not seen since December 1982. It said the evidence of renewed interest offered by the mortgage approval numbers was backed up by its November housing market survey, which found an increase in the number of would-be buyers making enquires for the sixth consecutive month.
"With interest rates likely to fall further in the next few months, we expect current firm market conditions to be maintained," Rics said. "As a result, mortgage approvals are likely to hit 1.33m in 2006 compared to an expected total of 1.2m for 2005, but still below the 2002 level of 1.42m."
Howard Archer, chief UK economist from consultancy Global Insight, said the figures were further evidence that the housing market was "relatively healthy" and that this would prevent price falls. He added: "Very muted consumer credit growth in November indicates that consumers are still cautious overall in their behaviour.
"This is also reinforced by reports that consumer interest in the post-Christmas sales appears to have diminished fairly quickly away after a relatively strong start."
Guardian Unlimited © Guardian Newspapers Limited 2006
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