signs of Underlying weakness in housing market
The BBA today released the September 2016 figures for the high street banks.
Gross mortgage borrowing of £12bn in the month was 2% lower than in September 2015, net mortgage borrowing is 2.6% higher than a year ago.
House purchase approval numbers are 15% lower than in September 2015 and in the first nine months of 2016 they are 3% lower than in the same period of 2015.
Dr Rebecca Harding, BBA Chief Economist, said: “Consumer credit is growing at its fastest rate since December 2006, driven by strong demand for personal loans and credit cards. Consumers are increasingly using short-term borrowing to take advantage of record low interest rates. This trend has accelerated since the Bank of England cut rates in August.
“Mortgage approvals picked up slightly this month but the housing market continues to shows signs of underlying weakness. Both house purchase and remortgaging approvals are down on the corresponding figures for 2015.
“Business borrowing decreased slightly again in September, which may be in part down to uncertainty following the EU referendum. There is a longer time lag behind corporate investment decisions so it may take longer for the effect of the interest rate cut to filter through to such borrowing.”
Read the BBA report in full click here