Written by rosalind renshaw

New sets of figures reveal the gaping disparity between actual mortgages lent and the 'seasonally adjusted' mortgages which banks claim to have lent.

The British Bankers Association said banks approved 38,092 mortgages for house purchase in January, and trumpeted the seeming achievement of its headline figures.

But the ‘seasonally-adjusted’ figures are in stark contrast to the 'non-seasonally adjusted' figures hidden away on a spreadsheet, showing that in reality, just 23,392 mortgages were actually lent last month for house purchase.

The ‘seasonally-adjusted’ figure was 34% up on the previous January, which the BBA said was the result of first-time buyers trying to complete transactions before the Stamp Duty holiday ends in March.

However, the ‘official’ adjusted figures were immediately challenged.  

Nick Hopkinson, director of property firm PPR Estates, said that the ‘real’ figures were a much truer reflection of lending than the ‘seasonally-adjusted’ data.

He said: “The high street banks approved a mere 23,392 house purchase loans in January. This is down over 50% on the normal market levels we were seeing pre-credit crunch, even though the main banks have been taking market share off building societies and other lenders in the last couple of years.

“Large 25%-plus deposits and perfect credit scores remain essential if you want to borrow money at the moment, which rules many prospective buyers out.

“When you consider that two of the biggest high street lenders, Lloyds and RBS, are currently taxpayer-owned and in theory have almost infinite reserves to lend from, this is a damning indictment on banker activity to support the economy – just when struggling home owners need money most.

“Lending to small businesses is also shrinking as the same group of bankers fail in their duties in supporting this crucial part of the wider economy as well.
“With Stamp Duty on first-time buyer homes set to return to 1% for all purchases above £125,000 very soon, it seems things are not going to get any easier for the housing market.

“Growing unemployment, shrinking household incomes due to spiralling personal inflation, further ‘hot’ money from QE driving inflation, and the wider economic uncertainty around the Eurozone will continue to put downward pressure on house prices for the foreseeable future.

“It seems very unlikely the Chancellor will be able to ‘save the day’ with his Budget next month.”

According to the BBA’s ‘seasonally-adjusted’ figures, mortgage lending for house purchase was up from 36,553 in December and 34,961 in November, although overall mortgage approvals – including remortgages – was virtually unchanged at 74,250.

*According to the Council of Mortgage Lenders, gross mortgage lending declined to an estimated £10.5bn in January. Lending fell by 14% from £12.2bn in December but was 10% higher than the total of £9.5bn in January 2011.
The CML said that although a seasonal decline was expected, January was the sixth month in a row of higher year-on-year lending.
CML chief economist Bob Pannell said: “Housing and mortgage market sentiment has improved a little over recent weeks.
“The increase in lending compared to January last year helps support our view that housing and mortgage market activity may be boosted by first-time buyers seeking to complete deals before the Stamp Duty concession ends in March.
“Should inflationary pressures continue to fall back, the squeeze on household finances should ease progressively and help support stronger economic recovery going into the second half of the year.

“This can only be good news for the housing market further down the track."


  • icon

    As I have always said you can prove anything with a calculator - good bad or indifferent. The only statistics worth a jot are provided by the Land Registry on COMPLETED SALES.

    • 24 February 2012 11:04 AM
  • icon

    No but they usually do - or at least they did as they say "in my day" (dreadful phrase!!).

    As you say RNR the final stat is Land Registry completions of new loans.

    • 24 February 2012 10:39 AM
  • icon

    Approvals don't always turn into actual loans either...

    • 24 February 2012 10:09 AM
  • icon

    I suggest no jokes are made about this and it is a far more significant story than the rip off RM one above it.

    Want to know why?

    25 years ago when I worked for Nationwide the biggest branch of a cluster of 6 I had, a major south coast city, made on average about 70 full house purchase loans and a further 30 or so further advances for double glazing, central heating etc.

    At thet time Nationwide had around 730 branches and on average they were probably making I'd say at least 30 fiull loans a month.

    That makes 22,000 loans BY ONE BUILDING SOCIETY

    Now do you see the significance of this story. If all lenders have really only made 23,392 new loans for house purchase (as opposed to remortgages and further advances) then the market is as flat as a pancake no matter how you dress it up.

    If it includes remortages (a new loan from the lender but not for house purchase so hopefully not included) then the market is flatlining and is completely dead.

    February I doubt will have been any better.

    • 24 February 2012 10:05 AM
  • icon

    When they were up, they were up
    And when they were down, they were up*

    * seasonally adjusted

    • 24 February 2012 09:42 AM
  • icon

    Wigan are going to win the Premiership this season (seasonally adjusted).

    • 24 February 2012 07:32 AM