27 April 2011
Last updated at 05:09 ET
Economic worries are reining in all forms of borrowing, the banks say
Mortgage lending by the UK’s main banks is still very subdued, according to the British Bankers’ Association (BBA).
The number of new mortgages approved by its members for house purchase rose by just 1,482 in March to 31,660.
However, this was still 10% fewer than in March 2010 and suggests that activity in the coming months will remain depressed.
The BBA said worries about the economy were depressing all forms of bank lending.
“Weak trading activity is discouraging businesses from borrowing to expand and most are oriented towards repaying debt and reducing their operating costs,” said the BBA’s statistics director, David Dooks.
“Householders also remain focused on paying down debt, leading to a net contraction of unsecured borrowing and low net mortgage lending, although new mortgage lending is holding up fairly well,” he added.
The BBA explained that unsecured lending by its members – such as on credit cards, overdrafts and bank loans – had been flat in March, with no
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