Mortgage lending sees growth
Published On 20 November 2007
The Council of Mortgage Lenders (CML) has forecast a trying few months ahead for the housing market, as gross mortgage lending grew by six per cent in October 2007.According to the new statistics, gross lending grew to £32.4 billion in October, up from £30.6 billion in September, with the increase attributed to applications and approvals from before the mortgage market was hit by the global credit crisis.
However, with ongoing financial pressures on consumers and the reluctance of providers to offer loans at competitive rates, the CML estimated that mortgage advances would be significantly lower during the rest of the fourth quarter.
"The next few months will be a testing time as ongoing pressures in financial markets feed through into the wider economy," said Michael Coogan, CML director general. "Funding constraints will continue to restrict lending activity and make loans more expensive."
The most recent Quarterly Inflation Report from the Bank of England suggests that interest rate reductions will occur early next year and provide at least some relief to borrowers, the CML added.
According to the Building Societies Association, net mortgage advances fell to £1.12 billion last month, compared with £1.66 billion the same month last year.
