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oh crikey: Mortgage lending hits new high

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    oh crikey: Mortgage lending hits new high

    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."

    ----------------------------

    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!

    #2
    Demand > Supply = Price Rises

    You've been told often enough.

    See that boat in the distance.........
    Guy Fawkes - "The last man to enter Parliament with honourable intentions."

    Comment


      #3
      Ah, but there is a limit. As soon as the building societies/banks start getting cagey about affordability, then they'll start restricting mortage deals. They're not worried at the moment because they can always repo a property which they think will continue to increase in price. As soon as THEY believe that house price inflation has reached it's limits, they'll start being cautious about mortgage lending and there'll be a levelling out of prices. In my opinion.
      It's my opinion and I'm entitled to it. www.areyoupopular.mobi

      Comment


        #4
        In Japan it is normal to pass over morgage to your children: I would not classify myself as patriot of the UK (though I obviously wish her well), but IMO Brown is putting this country into deep debt sh1t for the sake of his own career ambition - this is the highest order of treason that can ever be: think he needs to be locked up in the same room with xoggoth.

        Of course the Human Rights Act will need to be ammended to allow stabbing of the traitors.

        Comment


          #5
          Ah well, I think some firm has proposed that option - passing mortgage from generation to generation. Maybe that's the answer - property so expensive it takes centuries to pay for !
          It's my opinion and I'm entitled to it. www.areyoupopular.mobi

          Comment


            #6
            Originally posted by oraclesmith
            Ah well, I think some firm has proposed that option - passing mortgage from generation to generation. Maybe that's the answer - property so expensive it takes centuries to pay for !

            Which will only make property even MORE expensive. it truely is self-fullfilling for the banks aint it!
            McCoy: "Medical men are trained in logic."
            Spock: "Trained? Judging from you, I would have guessed it was trial and error."

            Comment


              #7
              Originally posted by lilelvis2000
              Which will only make property even MORE expensive. it truely is self-fullfilling for the banks aint it!
              Thing is - when property bubble burts it is the banks who will get shafted: it is them who will have paid real money for asset that will lose huge chunk of it - a major banking system crisis will be upon us, the best that can happen now is no house price growth for many years to allow salaries catch up with the prices and inflation that will devalue debts.

              Comment


                #8
                and..... the only way that's going to happen is if the banks start to stop people borrowing so much. Remember most people are stupid and they think that house price inflation will go on forever, so will try to borrow silly amounts on the basis that in a few years time they will have a hugely valuable asset and they'll be paid something like what they put down on the mortgage application form. Or they're scared that they're going to have to pay 10 times their salary for a poxy 2 bed flat in a few years so they'd better buy quick.
                It's my opinion and I'm entitled to it. www.areyoupopular.mobi

                Comment


                  #9
                  Oops

                  I too have been predicting/hoping for a monumental crash in housing for years and it just isn't bl0ody happening!!!!

                  I've a nice house paid for so its more a place to live than an investment so if its worth 70p or £700,000 makes very little difference to me. I've got no debt steadfastly refusing to borrow any money because "I want to keep my powder dry for when the collapse happens so I can buy a street or two" to provide for me in my dotage but nothings doing. I feel like a chump that missed the party, it seems that there really is no day of retribution and people can just borrow what ever they want without consequence, bummer.

                  Comment


                    #10
                    Originally posted by vista
                    I too have been predicting/hoping for a monumental crash in housing for years and it just isn't bl0ody happening!!!!
                    Defaults and missed payments are both accelerating. That's the fuse you see burning!

                    Comment

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