BBA Reports an Increase in Mortgage Lending

According to the latest report published by the British Bankers’ Association on September 23rd, Wednesday, bank lending in the United Kingdom improved in August as lenders approved more residential mortgages and loans to non-commercial organisations. The figures, presented by the BBA, which were adequately seasonally-adjusted, show an increase of £2.8 billion in UK mortgage lending in August. This is the highest level registered since March 2009, and almost a £1 billion rise from the level of an increase in mortgage lending in July. The British Bankers’ Association report also showed a £2.4 billion increase in residential mortgage lending in terms of year-to-year statistics. As for lending to non-financial organisations, BBA reported a £0.7 billion rise in August, which represents a striking difference with a £4.1 billion decrease in lending this July. However, the demand for this type of lending has dropped, says BBA, as many firms turned to the bond market. Good news concerning the UK housing market was also reported by Mr. Flor O'Donoghue, analyst at Davy – wealth management and financial advice company. He said that UK housing transactions finally entered the positive territory after 2 years of stagnation. The information finds proof in the estimations of HM Revenue & Customs, which suggest that an average of 74,000 of housing transactions were seen last month, which compares to only 60,000 and 53,000 in August and November 2008 respectively. According to the quarterly statistics, which is said to be more accurate, the number of housing transactions in the time period from June to August 2009 exceeded that one of 2008 by 7%. The above-mentioned improvements in UK mortgage and housing markets are expected to positively affect the building industry, which generally reacts to any changes with a lag of a couple of months.