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High street banks report increased mortgage approvals

High street banks report increased mortgage approvals

(28 July 2015 – United Kingdom) Mortgage approvals for Britain’s high street banks were around 8 percent higher in June than the same time last year, according to the BBA.

BBA chief economist Richard Woolhouse said the housing market was beginning to heat up again, with an increase in the number of mortgage approvals for the past month.

“Interestingly, we’ve also seen an increase in the number of people remortgaging, which could be down to savvy borrowers taking advantage of competitive deals on fixed rate mortgages ahead of a possible rise in interest rates.

“Lending to some business sectors continues to show good results, although in the case of real estate banks are being cautious as they try to refinance bad loans.

“It’s good news that savings deposits are also up this month, as consumers put away a little something extra for a rainy day.”

The results take into account the effects of the changed in mortgage rules and found that remortgaging was 20 percent higher than the same time last year.

The BBA said this was probably a reflection of borrowers’ appetite to lock in to current fixed rates and gain certainty over their future outgoings.

Overall personal deposits grew at an annual rate of 3.1 percent.

Annual growth in unsecured borrowing is at 4.6 percent with both credit card and other unsecured borrowing (personal loans and overdrafts) growing at similar rates.

The BBA said stronger demand for personal loans continues to reflect improved credit availability and stronger household finances.

Over the past two years, net borrowing through personal loans has been rising and has expanded notably over the past two years.

Annual growth in high street banks’ credit card borrowing fell slightly to 4.7 percent in June and was largely in line with the wider (all issuers) credit card market which grew at an annual rate of 5.2 percent.

In the wider (all issuers) credit card market, card use continues to rise.

There were 231 million purchases in June, with a total value of £13.1 billion (A$27.9 billion).

This spending volume was 12 percent higher than in June 2014, and its aggregate value was some 8 percent higher.

Companies’ net borrowing reduced by £4.8 billion in June (leaving a net fall of £2.7 billion in the first half of 2015). 

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