July increases surprise mortgage lenders
The Council of Mortgage Lenders (CML) has reported that mortgage lending is still rising at a robust rate, despite five interest rate rises in the past year.
The Council’s figures for July show that lending reached £34.4 billion, a record amount for the month, in any year.
Although new lending was down slightly from that in June, the figure is still 13% higher than July 2006.
However, the CML does not expect the full impact of the Bank of England’s base rate rises to become evident until autumn of this year.
In addition, the CML data for mortgage lending figures in July includes a large number of people who are re-mortgaging.
This group of borrowers is seeking to minimise the financial impact of any further base rate rises by securing the most advantageous product available.
The latest figures from the British Bankers’ Association (BBA) also show a buoyant mortgage market.
BBA members account for roughly 60% of all UK mortgage lending, and net lending in July increased by £5.7 billion, taking into account repayments by mortgage holders.
The BBA has expressed surprise at the figure, which is above both the £5.4 billion recorded in June and the Association’s recent monthly average.