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Banks' gross mortgage lending down 13% annually in May

Banks' gross mortgage lending down 13% annually in May.

Gross mortgage lending by the high dtreet banks totalled £7.6bn in may, down 13% compared to May 2010, research from the British Bankers' Association shows.

The annual growth of the banks' net mortgage lending was 2% in May, remaining ahead of the 0.7% for the of the mortgage market in April.

House purchase approvals were slightly higher than in April but 15% lower than in May 2010.

The average house value stood at £147,700, 1.9% lower than a year earlier.

The number of remortgage approvals in May were slightly higher than the previous month but well down on earlier in the year, as expectations of interest rate that rises in the near-term appear to have receded.

Approvals for equity withdrawal continue to be subdued and were 20% lower than may 2010.

The BBA says that despite the weeknesses in both house purchasesand remortgage approvals gross mortgage lending is largely stable, but with repayments continuing at a fairly high level, net mortgage lending increased by only £1.2bn in May.

David Dooks, statistic director at the BBA, says: "Consumer spending was flat in May after the boost Easter and the royal wedding provided in April. Money is still tight and people continue to pay off debt rather than save or borrow."

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