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Mortgage activity slows

Mortgage lending in the UK is beginning to show signs of slowdown, the latest figures have shown.The apparent "stabilising" of demand comes on the back of interest rate rises in August and November in 2006; and January and May this year.According to the Council of Mortgage Lenders (CML), gross mortgage lending in April was £28.8 billion, down nine per cent from March's £31.7 billion total.But the organisation notes that last month's figure is still the highest ever recorded in April and 18 per cent up from last year's corresponding total."Lending is still strong, but it does seem to be stabilising in 2007 following its major growth in 2006," the CML's Michael Coogan explained."With higher interest rates now beginning to have an impact, the modest slowing in activity that we have been expecting over the rest of the year looks set to materialise. Even so, we continue to expect lending in 2007 to be around four to five per cent higher than in 2006."Similarly, the British Bankers' Association (BBA) said the net mortgage lending rose by an underlying £5 billion in April, slightly lower than both March's increase and 2007's monthly average of £5.4 billion."Lower mortgage demand, weaker deposit growth and little change in personal loans or credit card borrowing all point to people paying more attention to their finances," said BBA director of statistics David Dooks."High house prices and increasing monthly repayment costs are causing a slow down in the mortgage market and people are using money from their accounts instead of borrowing to meet their spending needs."

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