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Homes Mini-Boom Set To Slow
THE property mini-boom - which has delivered a half-year run of record mortgage lending - could be about to slow down, according to a report released today.
The latest figures by the Council of Mortgage Lenders showed a total of £25.1bn worth of home loans in April – the highest figure on record for the month and 16% higher than the previous year.
The shortened month, due to Easter, was £3.3bn below the figure for March, but the CML said the prospect of an interest rate rise could deter potential buyers.
Michael Coogan, director general of the CML, said: 'The record figures we have witnessed over the past six months illustrate that the market is in robust shape. Even so, the level of new mortgage approvals has stabilised in recent months, and we do not expect the underlying level of lending to rise from recent levels.
'In the past couple of months the interest rate picture has changed and financial markets are expecting the Bank of England to raise rates this summer. If this happens, housing and mortgage market activity is likely to slow down from the recent high levels as the year progresses.'
Evidence of a sustained revival in the housing market was supported by lending figures from the British Bankers' Association and the Building Societies Association, also released today.
The banks said mortgage lending rose by £5bn in April, slower than the £5.5bn increase in March but still almost reaching the six-month average of £5.1bn.
However, unsecured personal lending continued its slowdown, rising by £300m – £100m less than the six-month average. The increase was due to extra debt on credit cards, while loans and overdraft borrowing remained flat.
This is Money 19 May 2006