Mortgage lending up again in March
According to the Council of Mortgage Lenders, total mortgage lending on residential properties in March was at £31.3 billion, yet another record. The figure was 10 percent higher than that of a year ago, and was up 22 percent from lending in February. Much of the activity during the month, the CML says, was a result of borrowers seeking a second mortgage at a fixed rate ahead of expected hikes in the UK interest rate. Since then, many fixed rate products have been removed from the market in anticipation of higher interest rates.
The CML foresees that mortgage lending will remain at record levels even though the Bank of England is expected to raise interest rates again this year, upping the cost of borrowing money, with the organization’s director general predicting that mortgage lending will hit a record £360 billion in 2007. On the other hand, the British Bankers Association has pointed out that demand for loans has moderated in the past two months and forecast that it would continue to do so. In addition, it was also noted that the March advance likely reflected high rates of loan approvals in the last two months of 2006 and in January of this year.