Mortgage lending slightly up in February

The figures show that:

* Total sterling lending to the UK private sector showed a net increase of £16.2bn (+1.5%) to £1,091.2bn. This was considerably higher than both January’s rise of £11.8bn and the average rise for the previous six months of £12.3bn.

* Net mortgage lending in February rose by £4.8bn, some £0.6bn stronger than January and £0.3bn stronger than the average increase in the previous six months of £4.5bn. Growth in overall unsecured personal lending (+£0.7bn) was £0.4bn weaker than January. Credit card borrowing (+£0.1bn) was very weak while loans and overdrafts rose by £0.7bn (in line with the recent average of +£0.6bn).

* Lending to non-financial companies increased in February again in most industrial categories. Borrowing by real estate companies was in line with trend at +£1.4bn though weaker than the exceptional figure in January, whilst lending to wholesale trade increased by £1.0bn (reflecting takeover activity) and lending to construction companies (+£0.2bn) increased for the eighth consecutive month.

* Deposits from the private sector rose by £3.1bn (+0.4%) to £742.0bn. Of the total increase, personal deposits accounted for £1.7bn, slightly lower than the recent monthly average (+£1.9bn).

David Dooks, BBA director of statistics, said: "Despite low approvals in January, February’s mortgage lending was slightly higher than expected. However, it was only marginally above the recent trend and with demand for consumer credit subdued, particularly on cards, in line with weak retail sales, overall lending to individuals was very similar to recent months."

Lending to individuals (after allowing for the effects of securitisations, loans acquired from special purpose vehicles, transfers, acquisitions, etc).

Net lending rose by £5,523mn in February, compared to £5,266mn in January and £6,192mn in February 2004. Mortgage lending accounted for £4,798mn of the rise, compared to January’s rise of £4,170mn. Within consumer credit, February saw an increase in loans and overdrafts of £667mn compared to January’s figure of +£731mn, while the rise in credit card borrowing (+£69mn) was well down on the recent average (+£306mn).

Lending to financial companies decreased by £839mn, with net repayments by other financial intermediaries (-£584mn), leasing companies (-£455mn) and securities dealers (-£421mn) more than offsetting increased lending to insurance companies and pension funds (+£607mn).

Lending to real estate companies (+£1,396mn) was much lower than January but still in line with the recent average. Lending to most other non-financial categories increased, with wholesale trade (+£955mn) reflecting takeover activity, manufacturers (+£224mn) and construction companies (+£214mn), while transport repaid £184mn.