Mortgage lending continues to rise
Published On 24 July 2007
Mortgage lending in the UK reached record levels in June, new figures suggest.Data released by the Council of Mortgage Lenders (CML) indicates that gross mortgage lending reached £34.2 billion in June - up from £31.4 billion during the previous month.
Despite this rise, the increase was smaller than occurred between May and June in previous years - up nine per cent, compared to 12 per cent in 2006 and 15 per cent in 2005.
"Despite the record level of mortgage lending, there are signs that the market is feeling the cumulative effects of the five interest rate rises we have seen over the past year," explained CML director general Michael Coogan.
"This effect will become much more evident in the coming months as borrowers with fixed-rate mortgages come off their existing deal into a significantly higher interest rate environment."
Commenting on the figures, Oliver Gilmartin, a senior economist at the Royal Institution of Chartered Surveyors, said: "Record borrowing levels will only add to the concerns at the Bank of England that higher interest rates will be necessary to curb consumers' appetite for debt.
"However, the continuing rise in longer term borrowing costs means that fixed rate mortgage deals are becoming increasingly costly and this will start to have a more material impact on borrowers as we move into the winter."
