Mortgage lending in the United Kingdom increased slightly in October compared to the previous month, but conditions in the UK housing market continue to deteriorate, as home loan approvals eased yet again to a 19-month low, according to data released by the British Bankers Association (BBA).
The figures showed that non-financial companies continued to repay bank debt, with net mortgage lending staying negative last month.
“Activity in the mortgage and consumer-credit markets continued to be subdued in October, reflecting uncertain prospects for households and lower consumer confidence,” said Mr. David Dooks, statistics director at BBA.
Mortgage approvals in the UK eased again, at 30,766 in October. That was the lowest figure since March last year and compared to 42,076 in October last year.
Non-financial companies paid down debt last month, but at a smaller amount compared with the £3.3 billion repayment made in September. The BBA noted that continued contraction in mortgage lending reflected companies’ repayment plans and rebalancing of balance sheets.
“Credit availability for viable businesses has improved, so a continued contraction in net lending growth reflects repayment behaviour, particularly by larger companies,” said Mr. Dooks.