Growth in Mortgage Lending-But How Long?

The figures released by the Council of Mortgage Lenders (CML) show that mortgage lending has increased considerably in recent months.

There were 52,000 house purchase loans in June, worth  £7.6 billion. This was 23% more than in May in terms of value. Another promising trend is the increase in fixed rate mortgages probably due to the low interest rate prevailing in the market.

Remortgaging also showed improvement but the total figures were far below when compared to last year. One significant factor for increase in lending might be the possible increase in the interest rates in the coming months.

The buy-to-let mortgages also increased in the second quarter of the year. There were a total of 24,900 loans for buy-to let properties, an increase of about 15% over the second quarter of last year.

This satisfactory trend is not likely to last for a long time, according CML. Mr. Paul Samter, economist, CML, said that when the government withdraws its support to the financial sector, the borrowers may be in difficult to adjust themselves.

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