Mortgage lending continues to rise
According to the Council of Mortgage Lenders, mortgage lending in the UK is continuing to go from strength to strength despite soaring property prices and rising interest rates.
March saw another record being achieved in terms of mortgage lending figures, with lending for mortgages exceeding the £30 billion mark, reflection a 10% rise compared to this time last year. Net mortgage lending rose by £5.1 billion in March according to the British Bankers Association.
House prices in the UK are continuing t rise, and at present are 10 higher than they were this time last year. Interest rates have gone up three times since August of last years, riding from 4.5% last August to 5.25% by this January, and with another rise predicted for May and a further one for the summer. Yet, despite all of this mortgage lending is continuing to soar. The market is expected to enjoy continued success over the next few months.
A spokesman for the Council of Mortgage Lenders stated: "There is still a question mark over just how strong mortgage lending will be over the coming months as the prospect of higher interest rates takes its toll on demand. But we continue to expect mortgage lending to reach a record £360bn this year," he added.
The British Bankers Association was not quite so optimistic. One British Bankers Association official stated: "In the last two months, demand has moderated a little and, with no short-term prospect of costs reducing, mortgage lending growth should ease further in the months ahead."
The level of mortgage lending still being seen, despite the setbacks, is partly down to a change in lending strategies from lenders, who are now offering higher income multiples to borrowers that wish to purchase property, and are extending the term of the loans in order to make repayments easier for the borrower.
Tom Smith
27th April 2007
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