Less Borrowing, More Saving In June

• News
• Published: 23 Jul 2010 in Money and Mortgages

A subdued housing market in June coincided with the lowest number of mortgages approved for people buying a new home since the stamp duty holiday ended in February, figures have shown. 

The British Bankers' Association (BBA) said lenders granted 34,823 loans to potential house buyers during the month, which was down from 36,418 in May. The group said June's net mortgage lending, which strips out repayments and redemptions, was £2.1 billion, again lower than May's total of £2.5 billion. 

People continued to repay more than they spend on credit cards, but interest and charges on existing debts caused overall borrowing to rise by £120 million. This thrifty attitude continued in public attitudes to loans and overdrafts, where consumers paid back more than they borrowed for the 14th month in a row, contracting national lending by £314 million. 

During the 12 months to the end of June, unsecured lending fell by 2.7%, according to the BBA. 

Savings became a consumer priority again in June - after a steep drop in the month before and negative levels in April - as deposits rose by £1.65 billion. This £856 million more than in May, but still less than the previous six-month average of £2.7 billion.