British Banker's Association figures (BBA) show UK high street provider's are lending figures remain unchanged since last month.
However the banking sector trade body said the annual growth in the banks' net mortgage lending of 4.3% still substantially exceeds the figure for just 0.9% in April for the mortgage market overall.
Subdued spending has led to consumer credit contracting by 2.5% over the year, it said.
BBA statistics director, David Dooks said:
"High street banks are the main providers in the mortgage market, supplying 75% of all new lending and approving more than 35,000 loans for house purchase each month.
"The low interest rate environment is resulting in customers choosing to reduce or pay off borrowing, particularly personal loans, rather than saving.
"Lending to non-financial companies continues to be slow as demand for loans remains subdued," he added.
According to the figures, the high street banks are currently providing over 70% of approvals for house purchase, compared with around 55% three years ago.
The average value of house purchase approvals, at £150,500, was 10.5% higher than a year ago. Numbers of remortgaging and equity withdrawal approvals continue to be lower than a year earlier.
Friday 25 June 2010
Mortgage rates could drop further
The interest rates charged on mortgage loans could fall further this year.
The Centre for Economics and Business Research (CEBR) is predicting a slowdown in UK economic growth as a result of yesterday’s Budget, which it says could result in the Bank of England Base Rate staying at its current level of 0.5% until the end of 2012.
The continuing low Base Rate could prompt lenders to reduce mortgage rates from an average of around 4% to 3% by early next year, according to the CEBR.
The news comes hot on the heels of a report from data website Moneyfacts, which revealed that mortagage rates have fallen to a seven year low.
The average rate on a two-year fixed rate mortgage deal now stands at 4.52%, its lowest level since September 2003.
The cost of fixed rate mortgage deals has been falling since September last year.
Among the best two-year fixed rate mortgages currently available are a deal from The Co-operative Bank at a rate of 2.95% and a deal from HSBC at 2.99%.
Yorkshire Building Society also offers a two-year fixed rate mortgage deal at 3.05%.
The Centre for Economics and Business Research (CEBR) is predicting a slowdown in UK economic growth as a result of yesterday’s Budget, which it says could result in the Bank of England Base Rate staying at its current level of 0.5% until the end of 2012.
The continuing low Base Rate could prompt lenders to reduce mortgage rates from an average of around 4% to 3% by early next year, according to the CEBR.
The news comes hot on the heels of a report from data website Moneyfacts, which revealed that mortagage rates have fallen to a seven year low.
The average rate on a two-year fixed rate mortgage deal now stands at 4.52%, its lowest level since September 2003.
The cost of fixed rate mortgage deals has been falling since September last year.
Among the best two-year fixed rate mortgages currently available are a deal from The Co-operative Bank at a rate of 2.95% and a deal from HSBC at 2.99%.
Yorkshire Building Society also offers a two-year fixed rate mortgage deal at 3.05%.
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