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Lepista

Mortgage Approvals Are... Down

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It's blatantly because of the snow....

I suspect we will see plenty of headlines about the spring bounce next month as the effect of the snow wears off unfortunately, when in reality the situation will continue where October / November left off. At least the YoY comparison will continue to be bearish...

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Last month 29.7K

Expected 29.9K

Actual 28.7K

Listening to R5 Live, total lending was just £800million, the lowest in 11yrs

Edited by exiges

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9:40, Wednesday 26 January 2011
LONDON (
Reuters
) - The number of mortgage approvals fell to 28,726 in December from 29,696 in November (Berlin: NBXB.BE - news) , the lowest since January 2009,
seasonally adjusted
data from the British Bankers' Association showed on Wednesday.

Worst for 2 years or is it 11?

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9:40, Wednesday 26 January 2011
LONDON (
Reuters
) - The number of mortgage approvals fell to 28,726 in December from 29,696 in November (Berlin: NBXB.BE - news) , the lowest since January 2009,
seasonally adjusted
data from the British Bankers' Association showed on Wednesday.

Worst for 2 years or is it 11?

Ignoring 2008 (which was lower), this is the lowest for 11 years.

In other words, this is the second lowest in 11 years.

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Being a Luddite, can someone please inform me how these figures are different from the Mortgage Approval figures that also come out each month and are currently running at around 47K. Ta.

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Being a Luddite, can someone please inform me how these figures are different from the Mortgage Approval figures that also come out each month and are currently running at around 47K. Ta.

This figure is from the British Bankers Association and only includes figures from it's members. Hence they are lower.

Also there is CML approvals which TBH I don't understand where they get their numbers from.

The there's BoE preliminary approvals or trends in lending which is initial data from the five biggest lenders.

And finally BoE final approvals which is all data across all lenders.

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This figure is from the British Bankers Association and only includes figures from it's members. Hence they are lower.

Also there is CML approvals which TBH I don't understand where they get their numbers from.

The there's BoE preliminary approvals or trends in lending which is initial data from the five biggest lenders.

And finally BoE final approvals which is all data across all lenders.

No wonder people can extract whatever argument they want to when there is this much data to wade through.

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Being a Luddite, can someone please inform me how these figures are different from the Mortgage Approval figures that also come out each month and are currently running at around 47K. Ta.

The BBA statistics are for the main UK high street banks, predominantly Barclays, HSBC, Lloyds Banking Group, RBS, and Santander.

BBA approvals have been falling steadily since April, down from 36K to 29K. However this decline has been largely matched by an increase in mortgage approvals from non-BBA lenders. This is why the BoE’s mortgage approvals number has held up much better.

Here’s a chart showing the two series plotted together (the December number for the BoE hasn’t been published yet):

approvals.gif

Edit: forgot Santander

Edited by FreeTrader

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The BBA statistics are for the main UK high street banks, predominantly Barclays, HSBC, Lloyds Banking Group, RBS, and Santander.

BBA approvals have been falling steadily since April, down from 36K to 29K. However this decline has been largely matched by an increase in mortgage approvals from non-BBA lenders. This is why the BoE's mortgage approvals number has held up much better.

Here's a chart showing the two series plotted together (the December number for the BoE hasn't been published yet):

approvals.gif

Edit: forgot Santander

Very interesting. Can we expect the BoE numbers to 'fall' into line from here then?

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Very interesting. Can we expect the BoE numbers to 'fall' into line from here then?

For December? I’m not sure they’ll necessarily fall that much. In November non-BBA approvals jumped by 1,500, and if that happens again then overall BoE approvals would actually rise.

I’m somewhat ambivalent about the significance of approvals numbers. I know there’s a correlation between approvals and house prices, but I’m not sure we have enough data for this relationship to be viewed as a long-term given.

At the moment the banks and building societies are constrained by funding issues in how much they can lend, and so we can have 47,000 mortgages a month at an average of £140,000 per approval, or we can have 94,000 mortgages at £70,000 per approval. If house prices were to slide in nominal terms, it seems to me we could find mortgage approvals gradually rising as more buyers move in.

In short, rising approvals with falling prices isn’t beyond the realms of possibility.

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For December? I'm not sure they'll necessarily fall that much. In November non-BBA approvals jumped by 1,500, and if that happens again then overall BoE approvals would actually rise.

I'm somewhat ambivalent about the significance of approvals numbers. I know there's a correlation between approvals and house prices, but I'm not sure we have enough data for this relationship to be viewed as a long-term given.

At the moment the banks and building societies are constrained by funding issues in how much they can lend, and so we can have 47,000 mortgages a month at an average of £140,000 per approval, or we can have 94,000 mortgages at £70,000 per approval. If house prices were to slide in nominal terms, it seems to me we could find mortgage approvals gradually rising as more buyers move in.

In short, rising approvals with falling prices isn't beyond the realms of possibility.

Fascinating analysis - thank you!

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For December? I’m not sure they’ll necessarily fall that much. In November non-BBA approvals jumped by 1,500, and if that happens again then overall BoE approvals would actually rise.

I’m somewhat ambivalent about the significance of approvals numbers. I know there’s a correlation between approvals and house prices, but I’m not sure we have enough data for this relationship to be viewed as a long-term given.

At the moment the banks and building societies are constrained by funding issues in how much they can lend, and so we can have 47,000 mortgages a month at an average of £140,000 per approval, or we can have 94,000 mortgages at £70,000 per approval. If house prices were to slide in nominal terms, it seems to me we could find mortgage approvals gradually rising as more buyers move in.

In short, rising approvals with falling prices isn’t beyond the realms of possibility.

I think the relationship probably broke down once it got outside the bounds of "Normality".

That's the problem with these simple statistical models: they work - right up until the time they don't.

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http://www.bba.org.uk/media/article/december-figures-for-the-main-high-street-banks3

From the mortgage section:

The average value of house purchase approvals (£143,300) fell slightly but was 1.6% higher than a year ago.

Numbers of remortgage approvals in December were slightly stronger than the recent six-month average but for 2010 as a whole were some 7% lower than 2009.

Approval numbers for equity withdrawal loans continued to be weak and for 2010 were some 12% lower than 2009.

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and from the other lending section....

Numbers of credit card purchases were

5.9% lower in December compared to a

year ago and were in line with reported

weak retail sales volumes, partly

attributed to the bad weather in

December.

Repayment levels were higher and more

than matching new spending levels, so

the stable growth in card borrowing

largely reflected interest accruing.

Demand for personal loans continued to

be weak with new borrowing some 6.2%

lower than a year earlier.

In fact looking at the table below this section, net lending on credit cards in December was negative. I.e. more paid back than was taken out. No wonder GDP figures were so shocking when ordinary consumers are paying back debt during the year's major binge festival.

Folks is worried.

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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