July's magic mortgage medley

Published 21st Aug 2007

Gross mortgage lending reached a new record for the month of July, totalling £34.4 billion, according to new data from the Council of Mortgage Lenders...

Although this is down by 1% on the £34,847 of lending achieved in June, it is 13% higher than the £30.6 billion lent in the same month last year.

Mortgage lending remains robust despite the five interest rate rises since last August - although we have yet to see the full impact of higher rates.

Lending is currently being fuelled by a large number of people remortgaging to better deals in case rates go any higher.

As we move into the autumn the cumulative effects of these rate rises will become more pronounced, and we expect this to feed through to lower levels of mortgage lending as the year progresses. We still believe, however, that we are on target to reach a record £360 billion of mortgage lending this year

Borrowing buoyancy
The continued buoyancy of borrowing by home owners was reflected in figures from the British Bankers' Association (BBA).

Its members, who account for roughly 60% of all UK mortgage lending, said that net lending, which takes into account repayments by mortgage holders, rose by another £5.7bn in July.

"July's strong rise was surprising, given the expected cumulative impact of higher interest rates," said David Dooks of the BBA.

"This was higher than the £5.4bn recorded in both the previous month and the recent monthly average," he added.

Source: ' 'Move Channel Ltd' '

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