Mortgage lending hits new high
Sandra Haurant and agencies
Wednesday September 20, 2006
Guardian Unlimited
Ever-increasing house prices and a growing demand for property in the early summer months helped push mortgage lending to a further record high today.
The British Bankers' Association announced this morning that net mortgage lending had risen by £6.2bn in August, £400m higher than July and far greater than the six-month average of £5.4bn.
The Council of Mortgage Lenders (CML) said gross mortgage lending reached £32.7bn in August, up from £30bn in July and the tenth monthly record in the past year.
The CML, which represents 98% of the UK's residential mortgage lending, said it expected the trend to continue in the coming months as demand for property remains strong and house prices continue to rise.
However, it predicted that the prospect of a rise in interest rates over the next few months would eventually cause demand to moderate.
Meanwhile, the Building Societies Association (BSA) said it had seen the highest level of lending since 1988, with gross advances reaching almost £5.6bn in August, more than £1bn higher than the same month last year.
Neil Johnson, PR and policy manager at the BSA, said: "The mortgage market continues to be strong, and the approvals figure suggests that strong demand will continue and that the recent interest rate rise has had little impact on buyers. This clearly shows buyers viewing the future of the housing market with confidence.
"However, house prices are continuing to rise and interest rates are forecast to increase again later this year. Buyers need to ensure that against such a financial background they can meet their monthly mortgage payments into the future."
The latest increase in mortgage lending comes after a strong pick-up in the property market in the early part of summer, and appetite for borrowing showed little signs of slowing despite the Monetary Policy Committee's (MPC) decision to increase interest rates by 0.25% in August.
The MPC voted unanimously to keep interest rates on hold at 4.75% this month, but analysts widely expect a further increase in the near future, which could squeeze homeowners who have borrowed close to the limit of their means.
Milan Khatri, chief economist at the Royal Institution of Chartered Surveyors (Rics), said: "A surge in new mortgage lending in August, to record highs, is of little surprise coming on the back of a strong upturn in buyer inquiries recorded by Rics estate agents last month.
"The modest interest rate rise in August has done little to tame the housing market, though further hikes in borrowing costs later this year and in 2007 mean affordability conditions for first-time buyers will deteriorate."
Howard Archer, chief economist at Global Insight, said: "Along with a shortage of properties in some areas, the continuing strength of mortgage activity suggests that house prices are likely to see further strength in the near term at least, having recently regained upward momentum after faltering in the second quarter."
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Just when the **** these house prices will start falling, ffs! It is becoming embarassing to have been supporting such point of view for years and yet no sign of the crash!
Sandra Haurant and agencies
Wednesday September 20, 2006
Guardian Unlimited
Ever-increasing house prices and a growing demand for property in the early summer months helped push mortgage lending to a further record high today.
The British Bankers' Association announced this morning that net mortgage lending had risen by £6.2bn in August, £400m higher than July and far greater than the six-month average of £5.4bn.
The Council of Mortgage Lenders (CML) said gross mortgage lending reached £32.7bn in August, up from £30bn in July and the tenth monthly record in the past year.
The CML, which represents 98% of the UK's residential mortgage lending, said it expected the trend to continue in the coming months as demand for property remains strong and house prices continue to rise.
However, it predicted that the prospect of a rise in interest rates over the next few months would eventually cause demand to moderate.
Meanwhile, the Building Societies Association (BSA) said it had seen the highest level of lending since 1988, with gross advances reaching almost £5.6bn in August, more than £1bn higher than the same month last year.
Neil Johnson, PR and policy manager at the BSA, said: "The mortgage market continues to be strong, and the approvals figure suggests that strong demand will continue and that the recent interest rate rise has had little impact on buyers. This clearly shows buyers viewing the future of the housing market with confidence.
"However, house prices are continuing to rise and interest rates are forecast to increase again later this year. Buyers need to ensure that against such a financial background they can meet their monthly mortgage payments into the future."
The latest increase in mortgage lending comes after a strong pick-up in the property market in the early part of summer, and appetite for borrowing showed little signs of slowing despite the Monetary Policy Committee's (MPC) decision to increase interest rates by 0.25% in August.
The MPC voted unanimously to keep interest rates on hold at 4.75% this month, but analysts widely expect a further increase in the near future, which could squeeze homeowners who have borrowed close to the limit of their means.
Milan Khatri, chief economist at the Royal Institution of Chartered Surveyors (Rics), said: "A surge in new mortgage lending in August, to record highs, is of little surprise coming on the back of a strong upturn in buyer inquiries recorded by Rics estate agents last month.
"The modest interest rate rise in August has done little to tame the housing market, though further hikes in borrowing costs later this year and in 2007 mean affordability conditions for first-time buyers will deteriorate."
Howard Archer, chief economist at Global Insight, said: "Along with a shortage of properties in some areas, the continuing strength of mortgage activity suggests that house prices are likely to see further strength in the near term at least, having recently regained upward momentum after faltering in the second quarter."
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Just when the **** these house prices will start falling, ffs! It is becoming embarassing to have been supporting such point of view for years and yet no sign of the crash!
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