The high street banks' net mortgage lending of £2.7bn has not been as low for approximately eight years according to a report by the British Bankers' Association (BBA).

Personal deposits rose for the third successive month but the savings trend in bank accounts remained subdued. Lending to financial companies decreased as recent short-term lending unwound and there was a net repayment from non-financial companies.

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BBA statistics director, David Dooks, said of the latest data: "The house purchase part of the mortgage market appears to have stabilised, with slightly more approvals coming through, although April's weak net mortgage lending reflects the lower number of approvals in previous months. Households' uncertain financial circumstances not surprisingly continue to dictate consumer behaviour, both in the housing market and in generating only low demand for new personal loans. Company borrowing also reflects the economic backdrop, with most non-financial sectors seeing net repayments, although short-term finance for other financial companies unwound in the month, suggesting that their financing needs may be easing."

(CD/JM)