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Property market will continue growing, according to BBA

The British Bankers’ Association (BBA) has said that it expects the UK property market to continue growing strongly, as mortgage lending continues to increase.

In total, mortgage lending in January was 38% higher than in the same period a year ago, while the amount of mortgages that were approved, but yet to be lent, was up 57% year-on-year. The BBA has cited the governments ‘Help to Buy’ lending scheme as the main catalyst for the increase.

Statistics director at the BBA, David Dooks, said: “Mortgage lending continues to rise compared to a year earlier as mortgage assistance schemes help first-time buyers and housing chains more generally.

“Approvals for new purchases have climbed quite significantly and are now at their highest point since September 2007”, he continued.

While the wider economy continues to improve alongside the property market, it is expected that the Bank of England will start to raise interest rates from next year, and this will impact on the mortgage market.

The concern from the Financial Conduct Authority (FCA), one of the industry regulators, is that some of those who have taken out cheaper mortgage deals made available recently, may be vulnerable when rates rise. Due to this, the regulatory body has asked lenders to identify customers who are most at risk, and to come up with a repayment plan to help them.

Clive Adamson of the FCA said: “We want firms to take extra action to strengthen their arrears management practices and invest in their systems and people to make sure that they get this right.

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