Mortgages strong, consumer credit weaker in 2003

* Gross (new) mortgage lending totalled £15.8bn in December. The usual seasonal weakness meant this was lower than November's £16.4bn, though it brought the full year figure total to £181bn, some 20% more than in 2002. After redemptions and repayments, the annual net rise in lending was £61.9bn, some 10% more than the previous year.

* December saw the lowest monthly number of mortgage loans approved since last January, reflecting the usual drop in numbers around this time of year, though the 188,900 loans approved, with a total value of £14.2bn, was a stronger total than in previous Decembers. Compared to the same month a year earlier, these figures were 8% higher by number, and 26% higher by value.

* Net consumer credit rose by £0.7bn in December. This was in line with the recent trend, and, as in November, the card element of this borrowing was subdued, with new spending being well matched by repayments. The annual picture shows that for all forms of consumer credit, net lending rose by £9.1bn in 2003, compared to increases of £11.2bn in 2002 and £9.8bn in 2001.

David Dooks, BBA director of statistics, said:

"Though December saw the usual end-of-year weakening in mortgage demand, full year comparisons show that 2003 outstripped 2002 on any mortgage market measure. With the number of loans approved remaining strong for the time of year, lending growth looks set to remain buoyant into the early part of this year. In contrast, it is not clear whether consumer credit will follow suit. November and December rises in card borrowing were both subdued and, indeed, the annual picture shows overall consumer credit rising by less than in either of the two previous years, as consumers' preference to use secured borrowing options continue to substitute for traditional personal loans."

Mortgage Lending

* Gross lending of £15,788mn was down 4% from November's total, though it was still 21% above the total in December last year.

* December's seasonally adjusted rise in net lending was £5,410mn, only slightly above the trend average of +£5,300mn over the previous six months.

* Compared to a year earlier, December's approvals of house purchase loans were 23% higher by number and 46% by value, with the average at £107,300; the number of remortgaging loans were little different, though 10% higher by value; and equity withdrawal loans were 6% higher by number and 13% by value.

Consumer Credit

* New borrowing on credit cards totalled £8,223mn in December. Though this was 13% higher than in December 2002, repayments were also higher, so that the seasonally adjusted increase in net lending was just £158mn, less than half the December increase in the previous two years. Annually, however, net card lending rose by £3.7bn in 2003, compared with £3.3bn in 2002.

* New lending on personal loans and overdrafts, at £2,486mn, virtually repeated the total a year earlier. After seasonal adjustment, the rise in net lending was £510mn, equalling the average monthly increase over the previous six months. There was an increase of £5.3bn in 2003, compared with £8.0bn in the previous year.