(RTTNews) - UK mortgage lending weakened noticeably in May, the British Bankers Association, said Tuesday. The number of mortgage loans approved declined to what the association termed as record lows. The gross lending in May was 16% lower than the same period a year ago. Banks lent 16.2 billion pounds in May compared to 17 billion pounds in the previous month, while the average lending in the past six months amounted to16.9 billion pounds.

“Measures of mortgage activity were lower in May as a result of tighter lending criteria and economic pressures on households. Only re-mortgaging business is holding up, where people need or want to take advantage of deals with other lenders,” said British Bankers Association Statistics Director Davis Dooks.

Banks extended 27,968 house purchase loans in May, 56.1% lower, compared to the year ago period. The revised number of house purchase loans given in April was 34,752, while the average for the last six months was 40,570 loans. Re-mortgaging loans advanced were 63,303 a fall of 10% though they accounted for 53% of all mortgages approved.

Mortgage lending grew at a seasonally adjusted annual rate of 12.3% or by 4 billion pounds in May, while consumer credit growth gained 4.3% or 0.5 billion pounds, a reflection of lower credit cards repayment. The growth of personal deposits was 5.7%, a rise of 1.3 billion pounds, slowing from the strong growth in April, while company finance climbed 24%, an increase of 4.9 billion pounds. Overdrafts and personals loans decreased 13.7% in May.

“People spent more on credit cards, but repayment levels were lower than expected in May and after April’s busy month with people putting money into ISAs, personal deposits were not as strong,” according to Davis Dooks.

In May, real-estate companies took the biggest chunk of lending to non-financial companies, while the business services sector made a net repayment of borrowing.

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