Despite the fact that the lending of credit to businesses in February fell at a slower pace than January 2010, on Thursday 22 April figures released from the Bank of England (BoE) showed that it was still the second biggest annual percentage drop since records began. The housing market had a boost though, thanks to the fact that mortgage approvals rose for the first time this year and that lenders are likely to see further improvement.
The BoE said in its Trends in Lending report that February saw the flow of net lending to businesses fell by ?0.8 billion, making it the third consecutive monthly fall, but still a marked improvement on January?s drop of ?6.9 billion. This information meant the annual rate of decline went down from 9.4 per cent to 9.2 per cent, making this the biggest decline since monthly records began in 1999.
Britain?s six biggest lenders ? Santander, Barclays, HSBC, Lloyds Banking Group and Nationwide ? saw their mortgage approvals rise from 48,000 in February to 52,000 in March. This was the first monthly rise since November, according to an article from London South East.
The BoE report said: ?Most major UK lenders reported that effects from the severe weather around the turn of the year and the removal of the stamp duty relief at the year end had dissipated and were not affecting approvals or lending in March.?
Furthermore, lenders said they there should be some positive impact from first-time homebuyers on mortgage demand following tax changes announced in the British government?s budget last month.
