Mixed picture for mortgage lending

The value of mortgages lent by banks increased in August, but the overall figure fell.

Statistics from the British Bankers' Association (BBA) show that lending grew by £6.1 billion in the month, well above the recent monthly average of £5.4 billion.

However, the Council of Mortgage Lenders (CML) has published contrasting figures, which show that lending by banks, building societies and specialist lenders fell by six per cent in the month.

The BBA's figures appear to give no indication of the financial turmoil seen last week but the CML statistics seem to show that some lenders have become less lenient in light of problems in the US sub-prime market.

"Lending fell slightly in August, but was still at very high levels," said Michael Coogan, director general of the CML.

"We see no obvious decline in consumer demand, although some decrease in the supply of lending is being experienced in the short term as a result of the problems lenders face in raising wholesale funding," he added.

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