New Mortgages Back to 2007 Level
Wednesday, December 30, 2009 15:51The number of new mortgages in November returned to levels last seen two years ago just after the peak in house prices, according to the latest data from the British Bankers’ Association.
New loans for buying homes totaled 44713, comfortably above the average of the previous six months and 0.4% higher than the level in November 2007. Compared with 2008, the number of loans has more than doubled, but the BBA said this was merely a reflection of how bad the economy was last year rather than an explosion of demand today.
Moreover, the number of loans for remortgaging is 25% below its level of November 2008 and is only a third that seen at this time in 2007. “In the absence of remortgaging activity, gross lending is unlikely to grow from its current level,” the BBA said. Loans for equity withdrawal are about half their level of two years ago.
Overall, the BBA said the data suggested that households were paying off debt or accumulating savings. “Household priorities are showing up in the November figures,” said David Dooks, statistics director for the BBA. “Demand for new personal loans was weak and people are paying off debt or building savings in response to economic circumstances.”
Indeed, official data this week indicated that the national household savings rate at 8.6%, the highest level in more than 10 years and a stark contrast to the negative savings rate seen in early 2008.
One bright spot in the data was a small climb in lending to non-financial companies, the backbone of British industry.
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