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The McGlashan

Ft.com - Uk Lending Suffers Setback

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UK lending suffers setback

Lending to consumers and businesses suffered a setback in May, highlighting the threat to nascent green shoots from weak levels of credit.

Net lending secured on dwellings did not grow during the month, the worst performance since records began in 1993, the Bank of England said. The annual rate of lending growth of 1.3 per cent was also the slowest pace on record, and compares with a 11 per cent growth rate before in late 2007.

The slowdown in lending secured on dwellings came amid a slower than expected increase in new mortgage lending and a continued fall in remortgaging.

New mortgage approvals rose by 223 to 43,414 in May, the smallest increase since January.

“The minimal rise in mortgage approvals in May underlines the continued fragility of the housing market,†said Seema Shah of Capital Economics. “At this rate, mortgage approvals are unlikely to return to levels which historically have been consistent with stable prices until late next year.â€

(my emphasis)

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So Seema foresees 15-18m of further price falls if this is not a spring bounce but a sustained recovery (IE if things continue to recover at the current rate)!

God knows what she foresees would happen if our current upwards trend turns out to be a blip

Pretty bearish!

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this is the same report that others are seeing as bullish news?

http://www.housepricecrash.co.uk/forum/ind...t&p=1980987

my money's on the FT

It makes you wonder what would have happened to mortgage approvals for new house purchases, had there been any demand for re-mortgages.

It is possible that the amount of money that can be lent is limited to what they get in savings and what existing customers are paying back, wioth perhaps a v small wholesale contribution.

If that is true, then this figure is not likely to rise much.

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Net lending is gross lending minus repayments and redemptions.

As gross lending includes remortgaging, (which is falling due to borrowers staying on SVR) net lending will obviously decrease.

In more important news, the BoE reported lending for house purchase to have increased.

:)

Edited by Rinoa

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It makes you wonder what would have happened to mortgage approvals for new house purchases, had there been any demand for re-mortgages.

It is possible that the amount of money that can be lent is limited to what they get in savings and what existing customers are paying back, wioth perhaps a v small wholesale contribution.

If that is true, then this figure is not likely to rise much.

elsewhere in the report i believe there were significantly less applications turned down, yet roughly the same number approved, MoM - this would seem to confirm that there is a limit

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[quote name='bobthe~' date='Jun 29 2009, 04:24 PM' post='1981902'

......... It is possible that the amount of money that can be lent is limited to what they get in savings and what existing customers are paying back, .......

How quaint

& refreshing

& sensible

& maybe even sustainable.

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Net lending is gross lending minus repayments and redemptions.

As gross lending includes remortgaging, (which is falling due to borrowers staying on SVR) net lending will obviously decrease.

In more important news, the BoE reported lending for house purchase to have increased.

:)

:rolleyes:

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Sounds like good news to me, it's about time people here in the UK earn their money first before spending it like most other Europeans do.

It's not a SETBACK it's a STEP IN THE RIGHT DIRECTION!!

Edited by wise_eagle

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