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As the UK economy continues to dive bomb towards recession the Bank of England has given its most blatant indication to date that interest rates will fall again in January. The indication was that...
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Tuesday 21st August 2007
The latest figures from the Council of Mortgage Lenders (CML) show that mortgage lending reached £34.4 billion in July, despite five increases in interest rates in a year.
New lending, however, was down slightly from June - although it was it was still 13 per cent higher than last year - and the CML has warned that the full impact of the rate rises will not be evident until the autumn.
A CML spokesperson said: "Lending is currently being fuelled by a large number of people remortgaging to better deals in case rates go any higher."
Commenting on CML figures, Simon Rubinsohn, Royal Institute of Chartered Surveyors chief economist was somewhat pessimistic, saying: "While the housing market still remains resilient, the turmoil in financial markets will push up mortgage costs for in vogue longer term fixed rate deals and will further slow the residential property market.
"With 90 per cent of borrowers opting for fixed rate security, those who are already financially stretched will find themselves paying a higher price for the added peace of mind.
"There is already evidence that lenders are becoming more discriminating in advancing loans to borrowers and this could be compounded by possible job losses in the City if the volatility persists."
The CML said that the market was still on target to reach a record £360 billion of mortgage lending in 2007.
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