Mortgage Lending Declines in December

According to the reports released by the Council of Mortgage Lenders(CML),mortgage lending has reduced by 6% in December, to an estimated £11bn from its November’s £11.7bn.In December 2009 an estimated £13.3bn were advanced as mortgage loans, 18% lower than the same month in 2010.

The CML expects an increase in interest rate due to high inflation prevailing now. However the council argued that because of the slow growth rate the base rate would not likely to exceed 1% even if there was an increase in the interest rate.

Data released by the Royal Institution of Chartered Surveyors (RICS) showed that the fall in house prices has been stabilized, and was expected to increase in spring. Many people consider the low figures in December due to Christmas and bad weather.

Leading economists however feel bad with respect to the housing market in UK.According to them vested interests are playing behind all the optimistic reports on housing sector. The chief economist at the IHS Global Insight, Mr. Howard Archer, said that house prices were unlikely to collapse, but they would fall by around 10% by the end of 2011.

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