UK mortgage approvals in line with expectations in May

High Street banks approved 40,347 mortgages in May, which was pretty much in line with expectations for 40,300 mortgages to be approved.

The figure was down 3.3% from 40,686 in May last year and slightly lower than the monthly average of 41,923 over the previous six months, according to the British Bankers' Association.

Meanwhile, gross mortgage borrowing in May totalled £13.3bn, in line with recent months and 9% higher than a year earlier.

Net mortgage borrowing was 2.4% higher than a year ago while consumer credit annual growth was 5.1% in May compared with 6.4% in April, with the decline driven by weaker growth in personal loans and overdrafts.

Eric Leenders, BBA managing director for Retail Banking, said: "This month’s figures show that in the run up to the General Election, credit growth in personal loans, cards and overdrafts has slowed, which was reflected in lower spending; with increased household costs affecting growth in deposits and saving.

"Businesses appear to be weighing up their options before raising finance to fund projects or developments. After a long period of subdued company borrowing, overall growth is starting to stabilise at a modest rate.”