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Lending To Small Uk Firms Hits Record In June, Mortgage Approvals Slow

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http://uk.reuters.com/article/2013/07/29/uk-britain-lending-boe-idUKBRE96S08Z20130729

Lending to small and medium-sized British firms grew at its fastest pace on record in June, while mortgage approvals for house purchases fell, Bank of England data showed on Monday.

Lending to non-financial businesses shrank by a net 1.3 billion pounds. However, within that, lending to smaller firms rose by 238 million pounds, compared with the average monthly fall of 500 million pounds over the previous six months.

It was also the largest increase since records began in April 2011, although on the yearly basis it was still down more than 3 percent.

Luckily housing isn't the UK economy.

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This may be important:

The bank's preferred gauge of money supply, M4 excluding intermediate other financial corporations, rose 0.3 percent, taking the annual growth rate to 5.0 percent.

Someone posted a chart about M4 sometime ago. It may be useful to find an updated version.

.

Edited by Tired of Waiting

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The full BoE releases are actually quite interesting surprised that there aren't more comments.

http://www.bankofeng...eyandcredit.pdf

Table H (lending secured on dwellings)

Gross lending 14.4bn

Repayments 13.7bn

i.e. Net lending only +700m

Total outstanding debt secured on dwellings only growing at 0.5%... (Less than CPI or RPI so falling in real terms)

Table I: Approvals of loans secured on dwellings

Total House purchase Remortgaging Other

Value(a) Number Value Number Value Number Value Number

£ billions £ billions £ billions £ billions

VTVQ B3C8 B4B5 VTVX B4B6 B4B3 B4B7 B4B4

Mar 12.7 97,484 8.0 53,948 4.2 30,229 0.5 13,307

Apr 13.1 98,097 8.2 54,270 4.4 30,954 0.5 12,874

May 13.9 103,457 8.6 58,071 4.7 32,209 0.5 13,176

Jun 14.0 102,278 8.7 57,667 4.6 31,486 0.5 13,125

So approvals for both re-mortgaging and buying up, so we will see a dip in tends in lending when the actuals lend work through.

Average lent for purchase £150,866

Average re-mortgage £146,096 (this is much bigger than I would have thought.)

This suggests that lots of higher valued properties and / or IO are re-mortgaging at the moment. This average is up £20k+ on several years ago and £10k on a year ago.

Edited by koala_bear

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The full BoE releases are actually quite interesting surprised that there aren't more comments.

http://www.bankofeng...eyandcredit.pdf

Great stuff, thanks for the post.

What is up with Chart 9, lots of growth in credit cards and other loans? Is this FLS sponsored personal lending?

I've been getting the hard sell from my bank on both the credit card and personal loan front. When I finally called them back I spoke to someone in a call centre, I politely listened to the sell and then said that I had carefully got rid of all my debt and wasn't keen to get some more - there was a real change in the employees manner who broke out of the mechanical sales pitch and became distinctly human saying words to the effect of "Oh, I know exactly what you mean!" and the call ended very pleasantly. But maybe I should have got another credit card and a dirty great personal loan, ;)

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So approvals for both re-mortgaging and buying up, so we will see a dip in tends in lending when the actuals lend work through.

Average lent for purchase £150,866

Average re-mortgage £146,096 (this is much bigger than I would have thought.)

This suggests that lots of higher valued properties and / or IO are re-mortgaging at the moment. This average is up £20k+ on several years ago and £10k on a year ago.

Neal Hudson tweet

Average value of mortgage approvals have hit their highest ever, for both house purchase & remortgaging #UKHousing pic.twitter.com/T8CSd02ngO

BQWy2wWCQAIdHDv.png

Edited by 7 Year Itch

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Average lent for purchase £150,866

Average re-mortgage £146,096 (this is much bigger than I would have thought.)

This suggests that lots of higher valued properties and / or IO are re-mortgaging at the moment. This average is up £20k+ on several years ago and £10k on a year ago.

Could that be partly because banks would now want to be lending to rock solid borrowers with decent incomes? If I were them I wouldn't be chancing FTBs before the government kindly takes 20% of the lending risk away next January with Help to Bail Banks.

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Could that be partly because banks would now want to be lending to rock solid borrowers with decent incomes? If I were them I wouldn't be chancing FTBs before the government kindly takes 20% of the lending risk away next January with Help to Bail Banks.

You mean like this? Another Hudson tweet

The UK housing market has become increasingly dependent on higher income households (updated with yesterdays data) pic.twitter.com/l6mulvxLeT

BO5jV2gCEAET5ha.png

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Great stuff, thanks for the post.

What is up with Chart 9, lots of growth in credit cards and other loans? Is this FLS sponsored personal lending?

I've been getting the hard sell from my bank on both the credit card and personal loan front. When I finally called them back I spoke to someone in a call centre, I politely listened to the sell and then said that I had carefully got rid of all my debt and wasn't keen to get some more - there was a real change in the employees manner who broke out of the mechanical sales pitch and became distinctly human saying words to the effect of "Oh, I know exactly what you mean!" and the call ended very pleasantly. But maybe I should have got another credit card and a dirty great personal loan, ;)

Got a pre-approved CC through post (to the wrong address) from one of the scum lenders the dirty old bitch of threadneedle street seems so keen to encourage. First of its like for a long time (well since the last time the central banks was running up the country's debt like some banana rebpublic). No association with the company whatsoever, never been a customer or had any business with them.

Keeping the population buried in debt is 100% institutionalized.

It will end with another bust.

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I started my transport company just over a year ago and at the time it was almost impossible to find a fuel company who would give me a fuel card without my first lodging a £3,000 bond with them, now I seem to get at least one unsolicited phone call a week from a fuel company offering me a fuel card with ever-increasing credit terms and when I say "Enough already, I've got seven fuel cards now and I only needed one", then they just send me another one anyway.

There really does seem to be a concerted push to extend credit right now, and I'm 100% convinced it's because we have a general election on the horizon.

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I haven't read the linked story but I read the headline as presented.

I don't get mortgage approval/lending news stories. One months its up, the next it's down etc etc. To just glance the headlines it's probably the most confusing aspect of the housing "credit" market.

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Re really should pay more attention to these figures like we used too :(. This is the more forward looking of the monthly BoE Data sets so is more subject to revision etc but is good for reading the tea-leaves.

Re Chairman of the Bored:

This has been one of my FLS favourites

Unsecured debt and FLS - It is indeed. The credit limit is the key thing that matters, they can increase your credit limit using FLS and if you don't use it they can use the difference to cover the banks very short term funding instead (financing prop trading cough cough?). They increased my card limit day 1 of the FLS scheme for example (I have never paid a penny in card interest ever or used more than half the limit!)

Re Nouveau.

Spot on with the selective headline stuff, I found it telling a very different story after reading for just 120 seconds. aka you can't take a horse to water

Re others:

I really should start following Neal Hudson but there is more to it than he makes out. The re-mortgaging must be the first time some of the IO buyers of '05-07 have (been able to) re-mortgage. Previously there were more repayment mortgages and the balance re-mortgaging has now swapped to majority of current mortgages re-mortgaging being IO who have paid nothing down hence shooting skywards. If they are going fixed rate then they have locked in affordability so earning (& multiples) may not be as important as it seems.(especially if they are re-mortgaging before the BoE makes things harder... the ones who can't now will in the future)

Anecdote: recent FTBers I know have worked for investment banks / magic circle law firms for 10 years which might explain the average values, not much room left with absolute numbers of potential buyers left at this rate...

Edited by koala_bear

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The full BoE releases are actually quite interesting surprised that there aren't more comments.

http://www.bankofeng...eyandcredit.pdf

Table H (lending secured on dwellings)

Gross lending 14.4bn

Repayments 13.7bn

i.e. Net lending only +700m

Total outstanding debt secured on dwellings only growing at 0.5%... (Less than CPI or RPI so falling in real terms)

Table I: Approvals of loans secured on dwellings

Total House purchase Remortgaging Other

Value(a) Number Value Number Value Number Value Number

£ billions £ billions £ billions £ billions

VTVQ B3C8 B4B5 VTVX B4B6 B4B3 B4B7 B4B4

Mar 12.7 97,484 8.0 53,948 4.2 30,229 0.5 13,307

Apr 13.1 98,097 8.2 54,270 4.4 30,954 0.5 12,874

May 13.9 103,457 8.6 58,071 4.7 32,209 0.5 13,176

Jun 14.0 102,278 8.7 57,667 4.6 31,486 0.5 13,125

So approvals for both re-mortgaging and buying up, so we will see a dip in tends in lending when the actuals lend work through.

Average lent for purchase £150,866

Average re-mortgage £146,096 (this is much bigger than I would have thought.)

This suggests that lots of higher valued properties and / or IO are re-mortgaging at the moment. This average is up £20k+ on several years ago and £10k on a year ago.

Thanks kb, the rising average comments are insightful- can we assume that IO remortgagors are being pushed onto repayment deals to take the sting out that future spike in redemptions?

Net lending still low, and gross lending hardly rocketing.

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Thanks kb, the rising average comments are insightful- can we assume that IO re-mortgagors are being pushed onto repayment deals to take the sting out that future spike in redemptions?

Apparently so and massively - but only the most credit worthy are re-mortageing at the moment there must be ~1.2-1.3m on IO who haven't / can't.

Net lending still low, and gross lending hardly rocketing.

Net lending assuming no HP increase (which there have been slight rises) would only cover an extra 4,500-5,000 transactions a month which tallies all round.

The regional breakdown will get more and more interesting. London being completely different to the rest... (new build is now mostly london / SE skewed)

Interestingly the ex-olympic park properties (flats) have started to come on the market in the last few months (many more to come) ~20% of the increase nationally (i.e. the marginal incremental props) transactions could have come from that alone given the volumes.:o

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Apparently so and massively - but only the most credit worthy are re-mortageing at the moment there must be ~1.2-1.3m on IO who haven't / can't.

Net lending assuming no HP increase (which there have been slight rises) would only cover an extra 4,500-5,000 transactions a month which tallies all round.

The regional breakdown will get more and more interesting. London being completely different to the rest... (new build is now mostly london / SE skewed)

Interestingly the ex-olympic park properties (flats) have started to come on the market in the last few months (many more to come) ~20% of the increase nationally (i.e. the marginal incremental props) transactions could have come from that alone given the volumes.:o

Cheers. The Olympic supply boost will be a good test of the London bubble.

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