Mortgage market in the UK remains sound

The Major British Banking Groups (MBBG) account for some two-thirds of all mortgage lending outstanding and around 70% of gross lending. Additionally, they provide over half of all consumer credit outstanding and, within that, some 70% of all card credit. They include twelve of the fifteen largest mortgage lenders in the UK: Abbey, Alliance & Leicester, Barclays and Woolwich, Bradford & Bingley, HBOS (through Halifax and Bank of Scotland), HSBC Bank, LloydsTSB (through Cheltenham & Gloucester), Northern Rock, Royal Bank of Scotland and National Westminster.

1. Today they announced that January's gross mortgage lending was £16.6 Bn. and dropped 9% to £14.9 Bn in February 2008 (Feb 2007 = £ 14.0 Bn.)

2. 167,000 mortgages were approved (for all purposes) in February with an average loan approved for house purchase of £150,400, some 14% higher than a year earlier. It took 9 years for mortages to double from £50K to £100K and 4 years to rise to £150K. The total figure included new loans of 47,365 a 35% fall from the 72,339 home loans February 2007. When the crooks at Northern Wreck were lending to anyone who walked through the door and took 20% of the UK market)

3. Nett mortgage lending (gross lending minus repayments and redemptions) rose by £5.2bn, (Januarys increased by £5.4bn). The annual growth in net mortgage lending continued at around 14%.

4. Credit card borrowing was unchanged (Actually declined by £4 Mn.) in the month, while other loans and overdrafts fell by £0.2bn. New borrowing on credit cards totalled £6,224mn in February; 7% lower than February 2006. (This compard with increase in mortgage lending shows how borrowers prioritise their credit needs - housing is No 1 - belt tightening not wage increases driving growth)

5. Compared to February 2006, House purchase approvals declined by 5% in number and 8% in value in February year on year.Remortgaging approvals were up 6% by number and up 22% by value. Approvals for equity withdrawal ( A species of theft from the elderly - the first tranche of mortgages sold off by Northern Wreck to Sacks of Gold) were unchanged by number but 10% higher by value.

Which suggests that the housing market is firm and that some degree of rigour has been attached to loan approvals, which was long overdue. There appears little evidence of any decline in prices or willingness to adopt loans for £150,000. (Average household income (NIS) is approx £27,000) , this average value has increased in 12 months by 14% - well in excess of any rise in national incomes.

Joke of the Week

``I would be surprised if, in a few years time, house prices are markedly above where they are now,'' Bank of England Governor Mervyn King said on March 26 to Commons Treasury Select Committee with members of the Monetary Policy Committee in tow - including the hapless and hopeless Sir John Gieve.

We are stuck with this incompetent twat for 5 more years - even former MPC member DeAnne Julius said the BOE isn't cutting interest rates fast enough said Mervyn King was "behind the curve".

The UK’s deficit on trade in goods and services was £4.1 billion in January. The deficit on trade in goods was £7.5 billion, and the surplus on trade in services was £3.4 billion.

As indigenous energy sources, oil/gas/coal decline, and imports rise this gap will inexorably rise.

King's response is to throw money out of the helicopters at the banks, the pound declines (from 1.36Euros to 1.26 in the last 3 months)from 1.47 Euros to 1.26 in 12 months.

And inflation roars away ... Lordy Lord "Don I gotta Winner" King of the Bank said at the Mansion House 16th June 2007...

"Our central view remains that inflation will fall back this year as the rises in domestic gas and electricity prices last year drop out of the annual comparison, and the recent cuts in prices feed through to household bills."

What a twat.

In a trading statement this morning Northern Foods PLC hid away a little nugget ..."Average prices were 7.5% higher as Northern Foods recovered the hike in raw materials costs from its customers."

Friday 8.30 pm GMT ... £ closed against the € down 0.092 or 0.75% @ € 1.26215 lowest ever.