Is mortgage lending slowing down?
The latter part of 2006 saw mortgage lending figures shoot through the roof in the UK, and in November mortgage lending peaked according to the British Bankers' Association.
However, officials from the association have now revealed that the mortgage market could be slowing down and moderating, as for the past three months the rises in mortgage lending each month have been less than in the preceding month. In February mortgage lending through banks rose by £5.2 billion, compared to a rise of £5.4 billion in January.
The Building Societies Association has recently reported the highest February mortgage approval figures on record, with nearly five million pounds in mortgage approvals. However, the Director General of the Building Societies Association said that this does not mean that mortgage borrowing is not slowing down.
He said: "These are strong figures, but we may be seeing the peak of the market. The recent rate rises are still to work through fully into the mortgage market. "Therefore, mortgage lending figures might become a little more subdued as the year progresses"
In relation to the banking approval figures, the Director of Statistics for the British Bankers' Association, David Dooks, stated: 'Since lst November, when mortgage lending peaked, we have seen three successive months of mortgage lending rising by less than in the previous month, suggesting a moderating demand in the market.'
According to the results of these combined figures from the British Bankers' Association and the Building Societies Association, which were collated by the Council for Mortgage Lenders, mortgage lending for February 2007 was up by nine percent compared to February 2006, but down by seven percent compared to January 2007.
It is though that the several interest rate rises that have been enforced by the Bank of England
since last August, plus the worry of forthcoming additional rises, could soon start to impact the mortgage market.
2nd April 2007
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