Lending cools in April although housing market remains healthy

Lending cools in April although housing market remains healthy

	Published : Sat, 20 May 2006 09:15 By : Amy Watts Print this Story

LONDON - The mini-housing boom that was seen over the last few months appears to have cooled down, but nonetheless there was considerable activity on the housing market, according to the results of three separate surveys in April.

The British Bankers’ Association figures showed that the net mortgage lending growth fell to £5 billion in April from the £5.5 billion recorded in March. That figure was a 21-month high. The second set of figures from the Building Societies' Association showed that mortgage approvals slowed down in April, but continued to remain at the second highest level over the last 24 months.

Finally the Council of Mortgage Lenders data showed £25.1 billion was advanced for home loans in April, but was 12 percent below what was recorded in March. But CML said the lower figure could be attributed to there being only 23 working days in April due to Easter break.

"The record figures we have witnessed over the past six months illustrate that the market is in robust shape. Even so, the level of new mortgage approvals has stabilized in recent months, and we do not expect the underlying level of lending to rise from recent levels," said Michael Coogan, the CML's director-general. He was of the opinion that if the interest rates went up then it could slow don the market. "If this happens, housing and mortgage market activity is likely to slow down from the recent high levels as the year progresses," he said.

Analysts feel that the housing market could be leveling up. "While there are some signs that mortgage activity could be leveling off, it remains at a robust level. This suggests that house prices will firm further in the near term at least, particularly as latest survey evidence shows continuing high buyer interest and a shortage of available properties in some areas," said Howard Archer, the chief UK economist at Global Insight. "The continuing robustness of the housing market increases the odds of an interest rate hike sooner rather than later."